Near-surface air temperature is an essential climate variable for the study of many biophysical phenomena, yet is often only available as a daily mean or extrema (minimum, maximum). While many applications require sub-diurnal dynamics, temporal interpolation methods have substantial limitations and atmospheric reanalyses are complex models that typically have coarse spatial resolution and may only be periodically updated. To overcome these issues, we developed an hourly air temperature product for Australia with spatial interpolation of hourly observations from 621 stations between 1990 and 2019. The model was validated with hourly observations from 28 independent stations, compared against empirical temporal interpolation methods, and both regional (BARRA-R) and global (ERA5-Land) reanalysis outputs. We developed a time-varying (i.e., time-of-day and day-of-year) coastal distance index that corresponds to the known dynamics of sea breeze systems, improving interpolation performance by up to 22.4% during spring and summer in the afternoon and evening hours. Cross-validation and independent validation (n = 24/4 OzFlux/CosmOz field stations) statistics of our hourly output showed performance that was comparable with contemporary Australian interpolations of daily air temperature extrema (climatology/hourly/validation: R2 = 0.99/0.96/0.92, RMSE = 0.75/1.56/1.78 °C, Bias = -0.00/0.00/-0.03 °C). Our analyses demonstrate the limitations of temporal interpolation of daily air temperature extrema, which can be biased due to the inability to represent frontal systems and assumptions regarding rates of temperature change and the timing of minimum and maximum air temperature. Spatially interpolated hourly air temperature compared well against both BARRA-R and ERA5-Land, and performed better than both reanalyses when evaluated against the 28 independent validation stations. Our research demonstrates that spatial interpolation of sub-diurnal meteorological fields, such as air temperature, can mitigate the limitations of alternative data sources for studies of near-surface phenomena and plays an important ongoing role in supporting numerous scientific applications.