Photosynthetic activity and structural changes at subzero temperatures were monitored in the foliose lichen Umbilicaria aprina Nyl. from continental Antarctica. Carbon dioxide gas exchange measurements revealed that net photosynthesis and dark respiration occurred at subzero temperatures regardless of whether a lichen thallus saturated with liquid water was exposed to subzero temperatures, or if a dry thallus was re‐hydrated only from snow at subzero temperatures. When water‐saturated thalli of U. aprina were slowly cooled at subzero temperatures ice nucleation activity could be detected at — 5·4 °C, indicating extracellular freezing of water. Using low‐temperature scanning electron microscopy (LTSEM) it was demonstrated that extracellular ice formation leads to cytorrhysis in the photobiont cells and to cavitation in the mycobiont cells. Both processes were reversible if the lichen thallus was re‐warmed. When dry lichen thalli were covered with snow at subzero temperatures a substantial re‐hydration from snow could be observed in LTSEM micrographs and measured gravimetrically. The final thallus water content was strongly dependent on the temperature regime and gave water contents between 20% d. wt at — 21 °C and 56% d. wt at —4·5 °C after 16 h exposure. Carbon dioxide gas exchange measurements revealed that metabolic activity was initiated during re‐hydration from snow at subzero temperatures. It is proposed that water uptake from snow at subzero temperatures occurs in the gaseous phase and depends only on the temperature‐related differences in water potential between the cell contents and the surrounding atmosphere in equilibrium with snow. Photosynthetic activity and re‐hydration from snow at subzero temperatures are of great ecological importance for primary production in extreme environments such as Antarctica where metabolic activity is severely limited by water availability and low temperatures.