Indocalamus longiauritus (a dwarf bamboo) dominates forest understory and functions as an ecological filter to hinder the regeneration of canopy tree species in many temperate forests. However, the physiological mechanism underlying the function of ecological filters is not clear. In this study, we measured leaf-level carbon capture ability and use efficiency of the dwarf bamboo and the co-existing Fagus lucida (beech) and Castanopsis lamontii (chinkapin) seedlings in forest understory and small gaps in a beech–chinkapin mixed forest in the summer of 2005. The results indicated that I. longiauritus exhibited greater carbon capture ability, as indexed by light-saturated photosynthetic rate (Pmax), maximal carboxylation rate, maximal electron transport rate and carboxylation efficiency, than the co-occurring F. lucida and C. lamontii seedlings in both forest understory and small gaps. Higher carbon capture ability in I. longiauritus was related to its greater partition of absorbed light energy to photochemistry. I. longiauritus had higher photosynthetic nitrogen use efficiency than F. lucida and C. lamontii seedlings in both light environments. However, water use efficiency (WUE) in I. longiauritus was higher than F. lucida but lower than C. lamontii. This intermediate WUE in I. longiauritus was related to its intermediate light-saturated stomatal conductance. In addition, I. longiauritus reduced metabolic cost by increasing the ratio of Pmax to respiration rate, leading to increased net carbon balance. On the other hand, F. lucida and C. lamontii seedlings had greater plasticity of carbon capture ability and leaf structural traits, which might facilitate colonization of gaps and realization of natural regeneration in these species.