During the past decades, a series of new policies and ecological projects have been implemented to mitigate land degradation on the Mongolian Plateau. However, climatic effects from re-vegetation still remain largely unknown. In this paper, we investigate local land surface temperature response to re-vegetation changes by comparing between locations with forest or grassland gains and their nearby unchanged land units based on satellite observations. Our results demonstrate that reforestation in humid regions and grassland cover gains in arid regions result in annual net cooling effect, but temperature response to reforestation shows asymmetric diurnal (daytime cooling but nighttime warming) and seasonal (summer cooling but winter warming during daytime) cycle. Local cooling effect of transition land cover is enhanced with continuous restoration of vegetation. The underlying process is mainly controlled by biophysical effects from surface albedo and evapotranspiration. Increased albedo associated with snow cover in winter significantly contributes to the cooling effect of grassland, and evapotranspiration along with increase in precipitation amplifies interannual temperature differences especially in summer. This study reminds that rational land use policy should be formulated carefully to realize potential climatic benefits from re-vegetation projects.