The effects of competition on gas exchange of Indian grass [Sorghastrum nutans (L.) Nash.] seedlings growing either intraspecifically, or with little bluestem [Schizachyrium scoparium (Michx.) Nash] or tall goldenrod (Solidago canadensis L.) neighbours were studied in a greenhouse pot experiment. Significant decreases in net photosynthetic rate (P-N) and stomatal conductance (g(s)) occurred with increased density (zero to 16 neighbours in 25 cm diameter pots) over 19 weeks. Differences in gas exchange were not significantly related to neighbour plant identity, and overall gas exchange rates did not change from 13 to 19 weeks. The effects on gas exchange were reflected in comparable reductions in plant performance over the course of the experiment. Number of target plant leaves and tillers, and shoot biomass decreased with increasing neighbour density. The reduction in tiller numbers was also related to neighbour plant identity. Root/shoot ratio was reduced with increasing density of S. nutans and S. scoparium neighbours, but increased with the density of S. canadensis neighbours. Total plant yield per pot (sum of target and neighbour plant biomass) decreased with increased neighbour density. Reduced gas exchange in leaves at the top of the canopy, particularly P-N, with increased neighbour density may be due to soil nitrogen limitation, or low photosynthetic capacity of leaves that initially expanded under low irradiation. Low carbon fixation in these leaves would result in reduced plant performance, as in this study. This study suggests that incorporation of density-dependent effects on gas exchange into individual-based plant models would likely improve the ability of these models to accurately predict P-N.