Daily and seasonal net photosynthesis (Anet), transpiration (E), absorbed photosynthetically active radiation (Qa) and light-use efficiency (epsilonc) in a red maple container nursery were simulated with MAESTRA, a three-dimensional canopy model. Effects of canopy heterogeneity were simulated by imposing changes in crown spacing. The light transfer sub-model, a distribution model of incident, direct, diffuse and scattered radiation within MAESTRA, was validated against field measurements of light interception on an intra-crown scale. In the container nursery, we found that a fiber-optic-based method of integrating photosynthetically active radiation (Q) was more suitable for crown-layer light transfer measurements and adjustments than either orthogonal line or individual quantum sensor measurements. The model underestimated intercepted Q by 9.3, 18 and 11.1% for crown layers 1, 2 and 3, respectively; however, there were linear relationships between model estimates and observations made with each of the three measurement methods. We used the validated and parameterized light transfer model to assess intra-crown and intra-canopy light transfer on a layer, crown and canopy basis, and investigated effects of tree size ratio and tree spacing interactions on Anet, E, Qa and epsilonc in the container nursery. Heterogeneous crown and canopy photosynthesis were predicted to exceed values for a uniform canopy under space-limiting conditions. Tree size ratio had large effects on Anet, E, Qa and epsilonc when light to lower-canopy layers was limited by inadequate space between crowns. Increasing Qa at lower-crown layers had the largest impact on whole-crown and whole-canopy Anet, E, Qa and epsilonc. Increases in canopy productivity led to increased water use. Simulations of heterogeneous stands with adequate soil water indicated that light absorption is maximized under space-limiting conditions as a canopy crown moves toward heterogeneity. Nursery and plantation productivity per unit land area was optimized by tactical placement of trees of several sizes, but this was accompanied by increased canopy water use.