While the evolution and dynamics of cold‐air pools in basins and valleys continue to be an active area of research, the influence of vegetation cover on cold‐air pools remains largely unexamined. Recently, the Advanced Regional Prediction System (ARPS) atmospheric model has been modified to allow simulation of flow through a multilayer canopy (ARPS‐CANOPY). In this study, two‐dimensional numerical simulations are performed with ARPS‐CANOPY to examine the impact of sidewall forest cover on diurnal cold‐air pool formation inside an idealized valley. A cold‐air pool develops regardless of the presence or absence of sidewall vegetation. However, the strength of the temperature inversion and the overall cooling appear to be substantially modified by sidewall vegetation. The coldest overall valley temperature occurs with no sidewall vegetation cover while the warmest occurs when the valley sidewalls are fully covered with vegetation. In simulations with partial forest cover, the nocturnal cooling in approximately the upper two thirds (lower one third) of the valley atmosphere is shown to be most sensitive to forest cover along the upper half (lower half) of the sidewall. The sidewall forest cover also affects downslope flows through a combination of weaker surface cooling beneath the forest canopy and increased drag on air flowing down the sidewalls. Finally, the strength of downslope flow is shown to be highly sensitive to the presence or absence of trees farther up the slope.