The influence of temperature on diversity and ecosystem functioning is well studied; the converse however, that is, how biodiversity influences temperature, much less so. We manipulated freshwater algal species diversity in microbial microcosms to uncover how diversity influenced primary production, which is well documented in biodiversity research. We then also explored how visible-spectrum absorbance and the local thermal environment responded to biodiversity change. Variations in the local thermal environment, that is, in the temperature of the immediate surroundings of a community, are known to matter not only for the rate of ecosystem processes, but also for persistence of species assemblages and the very relationship between biodiversity and ecosystem functioning. In our microcosm experiment, we found a significant positive association between algal species richness and primary production, a negative association between primary production and visible-spectrum absorbance, and a positive association between visible-spectrum absorbance and the response of the local thermal environment (i.e., change in thermal infrared emittance over a unit time). These findings support an indirect effect of algal diversity on the local thermal environment pointing to a hitherto unrecognized biodiversity effect in which diversity has a predictable influence on local thermal environments.