To determine the environmental impact of industrial activity, we examined and compared the following parameters of physiological integrity in the epiphytic fruticose lichen Ramalina lacera. (1) Potential quantum yield of PSII expressed as the chlorophyll fluorescence ratio F(v)/F(m). (2) Spectral reflectance expressed as values of normalized difference vegetation index (NDVI). (3) Production of ethylene. (4) Electrolyte leakage brought about by degrading cell membranes in terms of electric conductivity. (5) The ratio A(435nm)/A(415nm) indicating the disintegration of chlorophyll. The amounts of Ba, Cu, K, Ni, S, V and Zn contained in the lichen thallus were measured to quantify the degree of pollution. Some of the lichen-carrying twigs collected at a relatively unpolluted control site were resuspended on the original trees as controls. Other lichens were transplanted to 19 biomonitoring sites. Transplanted lichens in polluted sites contained higher amounts of Ba, Ni, S, V and Zn than lichens in the control site and in most of the rural sites upon an exposure period of 8 months. Statistical analysis revealed negative correlations between F(v)/F(m) ratios and Ba contents of transplants. High Ba, Cu, Ni and Zn contents correlated negatively with NDVI values. NDVI values correlated with A(435nm)/A(415nm), F(v)/F(m) and K. The ratio A(435nm)/A(415nm) correlated positively with K and negatively with Ba, Cu and Zn. The production of ethylene correlated positively with Cu and Ba and negatively with A(435nm)/A(415nm), F(v)/F(m) and NDVI. Electric conductivity values correlated positively with Ba, Cu, Na, S, V and Zn and negatively with NDVI. Both elemental content and physiological alterations in transplants of R. lacera point to a high degree of contamination in the Haifa Bay region, which is polluted by fuel-oil combustion apart from other industrial activities. The present work suggests that in our specific study area, the most sensitive parameter to assess the vitality of the lichen thallus is electric conductivity whereas ethylene production is less sensitive.