Here we present, to the best of our knowledge, the first balanced light energy budget for a benthic microbial mat ecosystem, and show how the budget and the spatial distribution of the local photosynthetic efficiencies within the euphotic zone depend on the absorbed irradiance (J(abs)). Our approach uses microscale measurements of the rates of heat dissipation, gross photosynthesis and light absorption in the system, and a model describing light propagation and conversion in a scattering-absorbing medium. The energy budget was dominated by heat dissipation on the expense of photosynthesis: in light-limiting conditions, 95.5% of the absorbed light energy dissipated as heat and 4.5% was channeled into photosynthesis. This energy disproportionation changed in favor of heat dissipation at increasing irradiance, with >99% of the absorbed light energy being dissipated as heat and <1% used by photosynthesis at J(abs)>700 micromol photon m(-2) s(-1) (>150 J m(-2) s(-1)). Maximum photosynthetic efficiencies varied with depth in the euphotic zone between 0.014-0.047 O(2) per photon. Owing to steep light gradients, photosynthetic efficiencies varied differently with increasing irradiances at different depths in the euphotic zone; for example, at J(abs)>700 micromol photon m(-2) s(-1), they reached around 10% of the maximum values at depths 0-0.3 mm and progressively increased toward 100% below 0.3 mm. This study provides the base for addressing, in much more detail, the photobiology of densely populated photosynthetic systems with intense absorption and scattering. Furthermore, our analysis has promising applications in other areas of photosynthesis research, such as plant biology and biotechnology.