The role of morphological versus physiological foliar plasticity in the capacity for, and mechanisms of, photosynthetic acclimation was assessed in Picea abies (L.) Karst. and Abies alba Mill. saplings in a forest gap-understory light gradient (relative irradiance, RI, ranging from 0.02 to 0.32). The species investigated showed a similar foliar morphological plasticity along the light gradient, at both the needle level (through alteration in leaf dry mass per area) and the shoot level (through alteration in the silhouette area ratio, e.g., shoot silhouette to projected needle area ratio). In both species chlorophyll (Chl) concentration on a mass basis decreased at increasing RI, but was independent of RI when expressed on an area basis. In contrast, leaf N concentration on a mass basis was independent of RI, but was positively influenced by RI when expressed on an area basis. The parameters describing photosynthetic performance at low light (dark respiration rate, apparent quantum yield and light compensation point) suggest that Abies alba was better suited to maintain a positive carbon balance in shaded conditions. By contrast, parameters describing biochemical capacity at high light (maximum electron transport rate, Jmax and maximum ribulose-1,5-biphosphate carboxylation capacity, Vcmax) indicate that only Picea abies was capable of acclimating physiologically to high photosynthetic photon flux densities (PPFDs) by increasing nitrogen partitioning to Rubisco and Vcmax/mass by increasing RI. These results support the hypothesis that interspecific differences in nitrogen partitioning within the photosynthetic apparatus may provide a mechanistic basis for species separation along a light gradient. The differences in photosynthetic plasticity observed are likely to influence regeneration patterns and habitat breadth of the species investigated. The limited ability of Abies alba saplings to exploit high-light conditions may be a competitive disadvantage in large canopy gaps and thus limit recruitment of this species to small gaps.