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In Greenland, free‐living red coralline algae contribute to and dominate marine habitats along the coastline. Lithothamnion glaciale dominates coralline algae beds in many regions of the Arctic, but never in Godthåbsfjord, Greenland, where Clathromorphum sp. is dominant. To investigate environmental impacts on coralline algae distribution, calcification and primary productivity were measured in situ during summers of 2015 and 2016, and annual patterns of productivity in L. glaciale were monitored in laboratory‐based mesocosm experiments where temperature and salinity were manipulated to mimic high glacial melt. The results of field and cold‐room measurements indicate that both L. glaciale and Clathromorphum sp. had low calcification and photosynthetic rates during the Greenland summer (2015 and 2016), with maximum of 1.225 ± 0.17 or 0.002 ± 0.023 μmol CaCO3 · g−1 · h−1 and −0.007 ±0.003 or −0.004 ± 0.001 mg O2 · L−1 · h−1 in each species respectively. Mesocosm experiments indicate L. glaciale is a seasonal responder; photosynthetic and calcification rates increase with annual light cycles. Furthermore, metabolic processes in L. glaciale were negatively influenced by low salinity; positive growth rates only occurred in marine treatments where individuals accumulated an average of 1.85 ± 1.73 mg · d−1 of biomass through summer. These results indicate high freshwater input to the Godthåbsfjord region may drive the low abundance of L. glaciale, and could decrease species distribution as climate change increases freshwater input to the Arctic marine system via enhanced ice sheet runoff and glacier calving. [ABSTRACT FROM AUTHOR]