A headwater stream in coastal California was used to evaluate the temperature response of effective shade reduction. Spatial distribution of stream water temperatures for summer low-flow conditions (<0.006 m3 s−1) were highly correlated with net radiation and advective heat transfers from hyporheic exchange and subsequent streambed conduction. Using a heat budget model, mean maximum stream water temperatures were predicted to increase by 1.7 to 2.2 °C for 50% and 0% effective shade scenarios, respectively, at the downstream end of a 300 m treatment reach. Effects on mean maximum stream water temperature changes, as water flowed downstream through a 500 m shaded reach below the treatment reach, were reduced by 52 to 30% from the expected maximum temperature increases under the 50% and 0% effective shade scenarios, respectively. Maximum stream water temperature change predicted by net radiation heating alone was greater than measured and heat-budget-estimated temperatures. When the influence of hyporheic water exchange was combined with net radiation predictions, predicted temperatures were similar to measured and heat-budget-predicted temperatures. Results indicate that advective heat transfers associated with hyporheic exchange can promote downstream cooling following stream water temperature increases from shade reduction in a headwater stream with cascade, step-pool, and large woody debris forced-pool morphology.