Changes in the functional traits of the terricolous lichen Peltigera aphthosa with declining soil fertility during ecosystem retrogression were investigated. A well-documented retrogressive chronosequence of 28 forested islands in northern Sweden that differ greatly in fire history and which spans 5000 years was used. The abundance of cephalodia increased, indicative of higher N2-fixation rates resulting from lower N availability. Thallus δ13C values increased with ageing soils, in line with declining δ13C values of the humus substratum along this gradient. However, δ13C values were also driven by variation in factors that were at least partly independent of soil ageing. As such, δ13C values were mostly related to specific thallus mass (STM), possibly because a higher STM gives a thicker cortical layer and thus greater resistance to CO2 diffusion, leading to higher δ13C values. STM and other measured traits (i.e. thallus N, P, secondary compounds and water-holding capacity) were unresponsive to the gradient, despite these traits being very responsive to the same gradient in epiphytic lichen species.