AbstractIn streams where water temperatures stress native biota, management of riparian shade or hyporheic exchange are both considered viable management strategies for reducing the peaks of daily and seasonal stream channel temperature cycles. Although shade and hyporheic exchange may have similar effects on stream temperatures, their mechanisms differ. Improved understanding of the heat‐exchange mechanisms influenced by shade and hyporheic exchange will aid in the appropriate application of either stream temperature management strategy. To illustrate a conceptual model highlighting shade as ‘thermal insulation’ and hyporheic exchange imparting ‘thermal capacitance’ to a stream reach, we conducted an in‐silico simulation modelling experiment increasing shade or hyporheic exchange parameters on an idealized, hypothetical stream. We assessed the potential effects of increasing shade or hyporheic exchange on a stream reach using an established process‐based heat‐energy budget model of stream‐atmosphere heat exchange and incorporated an advection‐driven hyporheic heat exchange routine. The model tracked heat transport through the hyporheic zone and exchange with the stream channel, while including the effects of hyporheic water age distribution on upwelling hyporheic temperatures. Results showed that shade and hyporheic exchange similarly damped diurnal temperature cycles and differentially altered seasonal cycles of our theoretical stream. In winter, hyporheic exchange warmed simulated channel temperatures whereas shade had little effect. In summer, both shade and hyporheic exchange cooled channel temperatures, though the effects of shade were more pronounced. Our simple‐to‐grasp analogies of ‘thermal insulation’ for shade effects and ‘thermal capacitance’ for hyporheic exchange effects on stream temperature encourage more accurate conceptualization of complex, dynamic heat exchange processes among the atmosphere, stream channel, and alluvial aquifer.