Emerging new-generation geostationary satellites have broadened the scope for studying the diurnal cycle of ecosystem functions. We exploit observations from the Geostationary Operational Environmental Satellite-R series to examine the effect of a severe U.S. heatwave in 2020 on the diurnal variations of ecosystem photosynthesis. We find divergent responses of photosynthesis to the heatwave across vegetation types and aridity gradients, with drylands exhibiting widespread midday and afternoon depression in photosynthesis. The diurnal centroid and peak time of dryland gross primary production (GPP) substantially shift toward earlier morning times, reflecting notable water and heat stress. Our geostationary satellite-based method outperforms traditional radiation-based upscaling methods from polar-orbiting satellite snapshots in estimating daily GPP and GPP loss during heatwaves. These findings underscore the potential of geostationary satellites for diurnal photosynthesis monitoring and highlight the necessity to consider the increased diurnal asymmetry in GPP under stress when evaluating carbon-climate interactions.