To determine the impact of altering the sink:source balance on gas exchange rates in 1-year-old foliage of balsam fir (Abies balsamea (L.) Mill.), seedlings were either debudded before the growing season began or left intact. To assess alternative explanations for the observed photosynthetic response, additional seedlings were variously root pruned, shaded, drought stressed or deprived of fertilizer in combination with debudding. Foliar gas exchange rates and carbohydrate concentrations, xylem water potential and current-year growth were measured on three occasions spanning the shoot extension period. In addition, growth, foliar concentrations of chlorophyll, nitrogen, phosphorus and potassium, chlorophyll fluorescence and photosynthetic rate at different CO2 concentrations were determined 1 month after shoot extension ceased. Debudded seedlings had higher photosynthetic rates than budded seedlings, and the difference increased as the growing season progressed. We observed no evidence that debudding increased photosynthetic rate by improving water relations or by reducing foliar carbohydrate concentrations. Debudding increased foliar concentrations of nitrogen, phosphorus, potassium and chlorophyll, as well as quantum yield and photochemical quenching as determined by chlorophyll fluorescence measurements. Therefore, we conclude that debudding increased the photosynthetic rate by increasing the allocation of nutrients to 1-year-old foliage, thereby enhancing the amount or activity, or both, of photosynthetic enzymes, as well as increasing chlorophyll concentration.