Recent global climate models predict a further significant loss of ozone in the next decades, with up to 50% depletion of the ozone layer over large parts of the Arctic resulting in an increase in ultraviolet-B radiation (UV-B) (280-315 nm) reaching the surface of the Earth. The percentage of total annual ecosystem N input due to biological nitrogen fixation by cyanobacteria might be as high as 80% and the contribution to total annual N uptake by plants up to 20%. A possible reduction of nitrogen fixation raises serious concerns about already nutrient impoverished plant communities. This review shows that nitrogen fixation by moss-associated cyanobacteria in arctic vegetation was dramatically reduced after six years of exposure to enhanced UV-B radiation. In subarctic vegetation, nitrogen fixation activity of moss-associated cyanobacteria was not affected by 6 years of enhanced UV-B radiation. However, a 50% increase of summer precipitation resulted in a 5- to 6-fold increase in activity. Long-term effects of UV-B radiation on nitrogen fixation activity have been examined only in two lichens, giving contrasting results. Peltigera aphthosa (L.) Willd., having external cephalodia, experienced a significant reduction, whereas Peltigera didactyla (With.) J.R. Laudon, having cyanobacteria in the photobiont layer below the upper cortex, did not experience any changes due to radiation regimes. The difference is probably related to the location of the cyanobacteria. While the Nostoc cells are protected by the fungal, melanized upper cortex in P. didactyla, they are exposed and unprotected in P. aphthosa, and their own synthesis of UV-B absorbing compounds appears to be low. Under certain environmental conditions, an increasing UV-B radiation will dramatically affect nitrogen fixation in arctic tundra vegetation, which in turn may have severe influence on the nitrogen budget in these environments. Further long-term studies are necessary to conclude if these effects are temporal and how concurrent climatic changes will influence the nitrogen balance of the ecosystem.