In our experimental research, we examined the relative influence of radiation and transpiration on the canopy temperature of urban trees in a hot-arid climate, from the viewpoint of microclimatic modification and pedestrian thermal stress. Our main objective was to identify, through controlled observations in an outdoor urban setting, the role of (a) cumulative shading by multiple layers of leaves and (b) the cooling induced by stomatal conductance and transpiration. Systematic measurements were conducted to simultaneously compare these regulating effects under conditions of water stress, in which leaf transpiration was negligible, and under control conditions of full transpiration ensured by regular irrigation. We found that the radiative temperature of leaves on the underside of urban tree canopies is mainly regulated by the cumulative shading effect of the multiple leaf layers above and to a lesser extent by their rate of transpiration. These findings have important implications for the design and maintenance of urban green spaces, especially as ongoing local and regional climate trends cause many cities to become both hotter and drier. By considering the ways in which we can use shade trees to moderate pedestrian thermal stress, and at the same time conserve precious water resources, we can envision a path toward greater urban resilience and an enhanced quality of urban life.