Deforestation in mid-to high latitudes is hypothesized to have the potential to cool the Earth's surface by altering biophysical processes(1-3). In climate models of continental-scale land clearing, the cooling is triggered by increases in surface albedo and is reinforced by a land albedo-sea ice feedback(4,5). This feedback is crucial in the model predictions; without it other biophysical processes may overwhelm the albedo effect to generate warming instead(5). Ongoing land-use activities, such as land management for climate mitigation, are occurring at local scales (hectares) presumably too small to generate the feedback, and it is not known whether the intrinsic biophysical mechanism on its own can change the surface temperature in a consistent manner(6,7). Nor has the effect of deforestation on climate been demonstrated over large areas from direct observations. Here we show that surface air temperature is lower in open land than in nearby forested land. The effect is 0.85 +/- 0.44 K (mean +/- one standard deviation) northwards of 45 degrees N and 0.21 +/- 0.53 K southwards. Below 35 degrees N there is weak evidence that deforestation leads to warming. Results are based on comparisons of temperature at forested eddy covariance towers in the USA and Canada and, as a proxy for small areas of cleared land, nearby surface weather stations. Night-time temperature changes unrelated to changes in surface albedo are an important contributor to the overall cooling effect. The observed latitudinal dependence is consistent with theoretical expectation of changes in energy loss from convection and radiation across latitudes in both the daytime and night-time phase of the diurnal cycle, the latter of which remains uncertain in climate models(8).