AbstractLand cover changes may affect climate and the energy balance of the Earth through their influence on the greenhouse gas composition of the atmosphere (biogeochemical effects) but also through shifts in the physical properties of the land surface (biophysical effects). We explored how the radiation budget changes following the replacement of temperate dry forests by crops in central semiarid Argentina and quantified the biophysical radiative forcing of this transformation. For this purpose, we computed the albedo and surface temperature for a 7‐year period (2003–2009) from MODIS imagery at 70 paired sites occupied by native forests and crops and calculated the radiation budget at the tropopause and surface levels using a columnar radiation model parameterized with satellite data. Mean annual black‐sky albedo and diurnal surface temperature were 50% and 2.5 °C higher in croplands than in dry forests. These contrasts increased the outgoing shortwave energy flux at the top of the atmosphere in croplands by a quarter (58.4 vs. 45.9 W m−2) which, together with a slight increase in the outgoing longwave flux, yielded a net cooling of −14 W m−2. This biophysical cooling effect would be equivalent to a reduction in atmospheric CO2 of 22 Mg C ha−1, which involves approximately a quarter to a half of the typical carbon emissions that accompany deforestation in these ecosystems. We showed that the replacement of dry forests by crops in central Argentina has strong biophysical effects on the energy budget which could counterbalance the biogeochemical effects of deforestation. Underestimating or ignoring these biophysical consequences of land‐use changes on climate will certainly curtail the effectiveness of many warming mitigation actions, particularly in semiarid regions where high radiation load and smaller active carbon pools would increase the relative importance of biophysical forcing.