Carex acutiformis and Brachypodium pinnatum were grown with a uniform distribution of photosynthetic photon flux density (PFD) with height, and in a vertical PFD gradient similar to the PFD gradient in a leaf canopy. Distribution of organic leaf N and light-saturated rates of photosynthesis were determined. These parameters were also determined on plants growing in a natural vegetation stand. The effect of a PFD gradient was compared with the effect of a leaf canopy. In Brachypodium, plants growing in a vegetation stand had increasing leaf N with plant height. However, distribution of leaf N was not influenced by the PFD gradient treatment. The gradient of leaf N in plants growing in a leaf canopy was not due to differences within the long, mostly erect, leaves but to differences between leaves. In Carex, however, the PFD gradient caused a clear increase of leaf N with height in individual leaves and thus also in plants. The leaf N gradient was similar to that of plants growing in a leaf canopy. Leaf N distribution was not affected by nutrient availability in Carex. In most cases, photosynthesis was positively related to leaf N. Hence, light-saturated rates of photosynthesis increased towards the top of the plants growing in leaf canopies in both species and, in Carex, also in the PFD gradient, thus contributing to increased N use efficiency for photosynthesis of the whole plant. It is concluded that in Carex the PFD gradient is the main environmental signal for leaf N allocation in response to shading in a leaf canopy, but one or more other signals must be involved in Brachypodium.