Some lichens that occur in mountains and arid regions have developed an unusual anatomy resembling window-leaved plants. In these lichens, algal cells occur in thick vertical stacks (algal stacks) separated by vertical channels of light-transferring fungal hyphae (fungal stacks). We present experimental evidence that this anatomy permits higher rates of area-based CO2 assimilation in strong light, but that it also leads to higher respiration resulting in higher compensation irradiance. The net effect of this anatomy must be beneficial in regions of high insolation, as it has arisen many times in different parts of the world, and in unrelated lichens, and these lichens often dominate the communities in which they occur.