Land use changes have great potential to influence temperature extremes. However, contradictory summer daytime temperature responses to deforestation are reported between observations and climate models. Here we present a pertinent comparison between multiple satellite-based datasets and climate model deforestation experiments. Observationally-based methods rely on a space-for-time assumption, which compares neighboring locations with contrasting land covers as a proxy for land use changes over time without considering possible atmospheric feedbacks. Offline land simulations or subgrid-level analyses agree with observed warming effects only when the space-for-time assumption is replicated. However, deforestation-related cloud and radiation effects manifest in coupled climate simulations and observations at larger scales, which show that a reduction of hot extremes with deforestation - as simulated in a number of CMIP5 models - is possible. Our study provides a design and analysis methodology for land use change studies and highlights the importance of including land-atmosphere coupling, which can alter deforestation-induced temperature changes.