Bryophytes make a significant contribution to carbon sequestration and storage in polar, boreal, temperate and tropical biomes, and yet there is limited understanding of the determinants of carbon isotope composition. Bryophytes are poikilohydric and lack stomata in the vegetative (gametophyte) stage, and lack of roots and reliance on liquid water to maintain hydration status also imposes diffusional limitations on CO2 uptake and extent of carbon isotope discrimination. Real-time gas exchange and instantaneous discrimination studies can be used to quantify responses to liquid phase limitation. Thus, wetted tissues show less negative δ13C signals due to liquid phase conductance and, as the thallus surface dries, maximum CO2 assimilation and discrimination are attained when the limitation is primarily the internal (mesophyll) conductance. Continued desiccation then leads to additional biochemical limitation in drought tolerant species, and low discrimination, although the carbon gain is low at this time. In this paper we explore the extent of carbon isotope discrimination in bulk organic material and cellulose as a function of climatic and environmental conditions, in temperate, tropical and Antarctic bryophytes. Field studies have been used to investigate seasonal variations in precipitation and water vapour inputs for cloud forest formations as a function of bryophyte biomass, diversity and isotope composition in epiphytes (particularly leafy liverworts) along an altitudinal gradient in Peru. In the Antarctic, moss banks sampled on Signy Island consisted of only two species, primarily Chorisodontium aciphyllum and some Polytrichum strictum, allowing the collection of shallow and deep cores representative of growth over the past 200 to 2000 years. The well-preserved peat has provided data on growth (14C) and stable isotopic proxies (13C, 18O) for material contemporary with recent anthropogenic climate forcing (over the past 200 years), for comparison with longer-term trends. Once corrected for source CO2 inputs, the carbon isotope signals are consistent with recent increases in growing season length. Laboratory studies on real-time CO2 uptake and isotope discrimination as a function of water content, for the desiccation-tolerant moss Syntrichia ruralis, reveal the interactions between surface water, liquid phase and mesophyll diffusion limitation. These data have been used to develop a model for isotope discrimination in mosses as a function of water status and we will discuss the extent that such a model can be used predictively to determine moss-peat water status, and infer current and past climatic conditions.