We examined needle-level light response of photosynthesis across a vertical light gradient within 45-55-m-tall western hemlock (Tsuga heterophylla (Raf.) Sarg.) and Douglas-fir (Pseudotsuga menziesii (Mirb.) Franco) trees growing in a 400-500-year-old mixed species stand. We determined: (1) whether light-saturated photosynthetic rates, light compensation points, and respiration rates varied from the upper to the lower canopy, and (2) if light-saturated photosynthetic rates, light compensation points, and respiration rates varied between Douglas-fir and western hemlock. Over a 25-m gradient from the canopy top to the lower canopy, mean light-saturated photosynthetic rates, light compensation points, and respiration rates declined in overstory Douglas-fir and western hemlock needles, paralleling a 65% decline in the mean daily photosynthetic photon flux density (PPFD). At the canopy top, increasing light-saturated photosynthetic rates relative to lower canopy needles increased carbon uptake at high PPFD. In the lower canopy, reduced respiration rates relative to upper canopy needles increased carbon uptake at low PPFD by reducing the light compensation point. At all canopy positions, western hemlock had lower mean light-saturated photosynthetic rates, light compensation points and respiration rates than Douglas-fir. As a result, western hemlock had higher net photosynthetic rates at low PPFD, but lower net photosynthetic rates at high PPFD compared with Douglas-fir.