How the accelerating pace of global warming will affect animal populations depends on the effects of increasing temperature across the life cycle. Developing young are sensitive to environmental challenges, often with life-long consequences, but the risks of climate warming during this period are insufficiently understood. This may be due to limited insight into physiological sensitivity and the temperatures that represent a thermal challenge for young. Here we examined the physiological and behavioural effects of increasing temperatures by measuring metabolic rate, water loss, and heat dissipation behaviours between 25–45 °C in nestlings of a small free-living songbird of temperate SE-Australia, the superb fairy-wren. We found a high and relatively narrow thermoneutral zone from 33.1 to 42.3 °C, with metabolic rate increasing and all nestlings panting above this range. Evaporative water loss sharply increased above 33.5 °C; at the same temperature, nestlings changed their posture (extended their wings) to facilitate passive heat loss. However, at all temperatures measured, water loss was insufficient to dissipate metabolically produced heat, indicating poor cooling capabilities, which persisted even when individuals were panting. While nestlings are relatively tolerant to higher temperatures, with no evidence for hyperthermia at temperatures below 42 °C, they are at a high risk of dehydration even at lower temperatures, with limited ability to mitigate this. Thus, climate warming is likely to elevate the risk dehydration, which is concerning, since it is accompanied by drier conditions.