Context Integrating trees and pastures can provide benefits to grazing animals in warm climates, such as provision of shade during the excessive heat. Aim Our aim was to evaluate the effects of two arrangements of trees on grass production and behavioural, physiological and blood parameters of crossbred lambs grazing massai grass (Megathyrsus maximus) pastures in a tropical environment in São Paulo state, Brazil. Methods Two groups of 24 Santa Inês × Dorper male lambs (~90 days old, 24.0 ± 3.3 and 22.0 ± 2.4 kg bodyweight, respectively) were used in two growing seasons, stratified by initial bodyweight and randomly assigned to one of three treatments: unshaded massai grass (no shading, NS), moderate shading (MS), or intense shading (IS). Treatments MS and IS were established with single rows of eucalyptus trees at spacing 12 m or 6 m between rows and 2 m within rows, corresponding to 786 and 1190 trees/ha. Each growing season consisted of two grazing cycles of ~20 days each, when tester animals grazed simultaneously in a rotational stocking system with variable stocking rate. Behavioural observations were feeding, lying ruminating, standing ruminating, lying, standing still, searching for food, and other. Physiological measurements were rectal temperature, respiratory frequency and heart rate. Blood parameters included haemogram, acute-phase proteins and serum cortisol concentrations. Key results Animals under treatment IS spent more time (P < 0.05) lying, standing still and at other activities than animals under NS and MS. Moreover, they presented lower rectal temperature and respiratory and heart rates than animals under NS during the first growing season, which was the season with higher temperatures. Cortisol and acute-phase proteins were not affected by treatment. Conclusions When animals were exposed to sun, the silvopastoral system was efficient for avoiding heat stress; however, the density of trees reduced the forage mass. Implications The silvopastoral system is a viable alternative production system in warm climates to improve the welfare of sheep, but the density of trees must be considered so that it does not negatively influence the forage mass.