In a range of plant species from three Californian vegetation types, we examined the widely used "normalized difference vegetation index" (NDVI) and "simple ratio" (SR) as indicators of canopy structure, light absorption, and photosynthetic activity. These indices, which are derived from canopy reflectance in the red and near‐infrared wavebands, highlighted phenological differences between evergreen and deciduous canopies. They were poor indicators of total canopy biomass due to the varying abundance of non‐green standing biomass in these vegetation types. However, in sparse canopies (leaf area index [LAI]°0‐2), NDVI was a sensitive indicator of canopy structure and chemical content (green biomass, green leaf area index, chlorophyll content, and foliar nitrogen content). At higher canopy green LAI values (>2; typical of dense shrubs and trees), NDVI was relatively insensitive to changes in canopy structure. Compared to SR, NDVI was better correlated with indicators of canopy structure and chemical content, but was equivalent to the logarithm of SR. In agreement with theoretical expectations, both NDVI and SR exhibited near‐linear correlations with fractional PAR intercepted by green leaves over a wide range of canopy densities. Maximum daily photosynthetic rates were positively correlated with NDVI and SR in annual grassland and semideciduous shrubs where canopy development and photosynthetic activity were in synchrony. The indices were also correlated with peak springtime canopy photosynthetic rates in evergreens. However, over most of the year, these indices were poor predictors of photosynthetic performance in evergreen species due to seasonal reductions in photosynthetic radiation‐use efficiency that occurred without substantial declines in canopy greenness. Our results support the use of these vegetation indices as remote indicators of PAR absorption, and thus potential photosynthetic activity, even in heterogeneous landscapes. To provide accurate estimates of vegetation‐atmosphere gas fluxes, remote NDVI and SR measurements need to be coupled with careful estimates of canopy photosynthetic radiation‐use efficiency.