<p><strong>Abstract.</strong> Understanding the dynamics of marine phytoplankton productivity requires mechanistic insight into the non-linear coupling of light absorption, photosynthetic electron transport and carbon fixation in response to environmental variability. In the present study, we examined the variability of phytoplankton light absorption characteristics, light-dependent electron transport and <sup>14</sup>C-uptake rates over a 48 hour period in the coastal Subarctic NE Pacific. We observed an intricately coordinated response of the different components of the photosynthetic process to diurnal irradiance cycles, which acted to maximise carbon fixation while simultaneously preventing damage by excess absorbed light energy. In particular, we found diurnal adjustments in pigment ratios, excitation energy transfer to reaction center II (RCII), the capacity for non-photochemical quenching (NPQ), and the light efficiency (&#945;) and maximum rates (P<sub>max</sub>) of RCII electron transport (ETRRCII) and <sup>14</sup>C-uptake. Comparison of these results from coastal waters to previous observations in offshore waters of the Subarctic NE Pacific provided insight into the effects of iron limitation on the optimization of photosynthesis. Under iron-limiting conditions, there was a significant reduction of iron-rich photosynthetic units per chlorophyll <i>a</i>, which was partly offset by higher light absorption and electron transport per photosystem II. Iron deficiency limited the capacity of phytoplankton to utilize peak mid-day irradiance for carbon fixation, and caused an upregulation of photo-protective mechanisms, including NPQ, and the decoupling of light absorption, electron transport and carbon fixation. Such decoupling resulted in an increased electron requirement (&#934;<sub>e,C</sub>) and decreased quantum efficiency (&#934;<sub>C</sub>) of carbon fixation at the iron-limited station. In both coastal and off-shore waters, &#934;<sub>e,C</sub> and &#934;<sub>C</sub> correlated strongly to NPQ. We discuss the implications of our results for the interpretation of bio-optical data, and the parameterization of numerical productivity models, both of which are vital tools in monitoring marine photosynthesis over large temporal and spatial scales.</p>