Indoor production of bedding plant seedlings using sole-source radiation may present value in increasing uniformity and consistency compared with greenhouse production. However, information on physiological acclimation related to growth and photosynthesis in seedlings exposed to high-intensity blue radiation and elevated CO2 is limited. Seedlings of petunia (Petunia ×hybrida) ‘Dreams Midnight’ were exposed to red (peak = 660 nm):blue (peak = 451 nm) radiation ratios of 50:50 (R50:B50) or 90:10 (R90:B10) and radiation intensities of 150 or 300 µmol·m−2·s–1 under two CO2 regimes of 450 or 900 µmol·mol–1. Shoot dry mass (SDM), leaf area index (LAI), internode length, and whole-plant photosynthesis and light-use efficiency (LUE) responses to increasing radiation intensity were measured. In addition, leaf photosynthetic rate (A) was measured at ambient and supra-optimal CO2 concentrations for plants grown under 450 µmol·mol–1 CO2. Our results indicated growth (based on SDM, LAI, and internode length) was lowered for seedlings produced under R50:B50 compared with R90:B10. However, we observed an increase in whole-plant light-saturated photosynthesis (Ag,max) and whole-plant light saturation point (LSP) under R50:B50 compared with R90:B10. In addition, we observed lower LUE below and higher LUE above a radiation intensity of 500 µmol·m−2·s–1 in seedlings grown under R50:B50 compared with R90:B10. Based on our results, seedling growth was lowered under a high proportion of blue radiation mainly due to lower radiation interception (due to lower LAI and shorter internode length) and LUE of intercepted radiation at the intensities used. Higher Ag,max and LSP in R50:B50 compared with R90:B10 under higher radiation intensities was likely in part due to higher LUE. Further investigation revealed A was higher at both optimal and supra-optimal CO2 concentrations under R50:B50 compared with R90:B10, indicating a lack of stomatal effects of a higher proportion of blue radiation on carboxylation and LUE. We hypothesize that higher LUE in R50:B50 compared with R90:B10 under higher radiation intensities is due to improved photochemical quenching from increased biosynthesis of carotenoids and anthocyanins. The results from our study generated fundamental information on growth and photosynthetic responses to excess blue radiation, data that can be further used in optimizing plant production in controlled environments.