Wetlands are widely promoted as nature-based solutions for climate mitigation and adaptation, yet their climate value is still assessed primarily through carbon-centric metrics. This focus overlooks another important pathway: biophysical regulation of land-atmosphere energy exchange. Driven by high rates of evapotranspiration, wetlands can exert a strong local cooling influence that is not captured in greenhouse gas (GHG) budgets alone. Using eddy covariance observations, surface energy balance measurements, and high-resolution thermal imagery from freshwater wetlands and adjacent croplands in Canada’s Prairie Pothole Region, we quantify the magnitude and spatial footprint of wetland-driven cooling. Across sites, wetlands exhibited surface temperatures that were typically 1-3 °C cooler than surrounding agricultural land during the growing season, with the strongest cooling occurring midday and during periods of elevated heat-stress. Thermal gradients observed in satellite imagery indicate that cooling effects extend tens to hundreds of metres beyond wetland boundaries, influencing adjacent fields. Importantly, several wetlands maintained pronounced cooling during dry years when net carbon uptake was reduced, demonstrating that biophysical cooling can persist even when biogeochemical mitigation weakens. Cooling magnitude varied systematically with wetland structure, particularly the proportion of open water versus emergent vegetation, revealing trade-offs among evapotranspiration, carbon uptake, and methane emissions. We synthesize these findings into a conceptual framework that integrates biogeochemical and biophysical processes to better represent the full climate regulation potential of wetlands. Explicitly incorporating wetland biophysical cooling alongside carbon regulation provides a more complete scientific basis for assessing their climate function and informing protection and restoration strategies in working landscapes.