In Gunnera, Nostoc cells invade secretory tissue forming well defined symbiotic areas within the stems and are termed internal nodules (Silvester, 1976). Excised, but intact, internal stem Nostoc nodules taken from Gunnera magellanica show light-stimulated nitrogenase activity and release a small, but measurable, proportion of their current N2 fixation as NH3 into the external solution. When nodules are disrupted and Nostoc extracted anaerobically, 90% or more of the estimated N2 fixation is released from the Nostoc cells as NH3 into the surrounding medium. Use of 15 N2 confirmed that only 12% of N2 fixed is retained within the cells of Nostoc. The remaining 88% was identified as NH3 released outside the cells. Within the intact nodule system, 15 N2 uptake showed that 2-5% of recently fixed N2 remains within the Nostoc cells and up to 30% of extracellular N is in asparagine after 1 h. Evidence is presented that stimulation of nitrogenase by light in the intact Gunnera/Nostoc system produces more NH3 than can be assimilated by the host cells, resulting in significant NH3 accumulation.