Abstract Tropical deforestation has local and regional effects on climate, but the sign and magnitude of these effects are still poorly constrained. Here we used satellite observations to evaluate the local land surface temperature and precipitation response to tropical deforestation in historical simulations from 24 CMIP6 models. We found tropical forest loss leads to an observed local dry season warming and reduced wet and dry season precipitation across the range of scales (0.25°-2°) analysed. At the largest scale analysed (2°), we observed a warming of 0.018 ± 0.001 °C per percentage point of forest loss (°C %⁻¹), broadly captured in the multi-model mean response of 0.017 ± 0.005 °C %⁻¹. The multi-model mean correctly simulates reduced precipitation due to forest loss in the dry season but simulates increased precipitation due to forest loss in the wet season, opposite to the observed response. We found that the simulated dry season surface temperature and precipitation changes due to forest loss depend on the simulated surface albedo change, with less warming and less drying in models with greater increases in surface albedo due to forest loss. Increased recognition of the local and regional climate benefits of tropical forests is needed to support sustainable land use policy.