We compare the evolution of simulated NOy and N2O with observations made during the 1999/2000 NASA Stratospheric Aerosol and Gas Experiment (SAGE) III Ozone Loss and Validation Experiment/Third European Stratospheric Experiment on Ozone-2000 to understand the different effects of transport on these two species and evaluate model transport processes in the Arctic lower stratosphere during mid to late winter. The simulations were made with the Goddard Space Flight Center chemistry and transport model, driven by meteorological analyses from the Goddard Data Assimilation Office. In January, model NOy and N2O distributions agree well with observations, provided a substantial loss of NOy due to polar stratospheric cloud sedimentation is included in the model simulation. In late winter, model NOy is ~2--3 times larger than observed, despite the continued reasonable agreement of N2O. Anomalously large vertical transport of NOy due to overly vigorous descent in the CTM is primarily responsible for the large late winter NOy mixing ratios. However, the rapid descent is not apparent in the evolution of modeled N2O and presumably other similar species due to compensating horizontal transport of N2O across the vortex edge, which results in the reasonable agreement between modeled and measured N2O at ER-2 altitudes throughout the winter. The need to properly represent the seasonal evolution of NOy when studying lower stratospheric polar wintertime photochemistry places strong constraints on the meteorological data used to drive global chemistry and transport models.