The rapidly increasing rate of urbanization has a major impact on the ecology and evolution of species. While increased temperatures are a key aspect of urbanization (“urban heat islands”), we have very limited knowledge whether this generates differentiation in thermal responses between rural and urban populations. In a common garden experiment, we compared the thermal performance curves (TPCs) for growth rate and mortality in larvae of the damselfly Coenagrion puella from three urban and three rural populations. TPCs for growth rate shifted vertically, consistent with the faster-slower theoretical model whereby the cold-adapted rural larvae grew faster than the warm-adapted urban larvae across temperatures. In line with costs of rapid growth, rural larvae showed lower survival than urban larvae across temperatures. The relatively lower temperatures, hence expected shorter growing seasons in rural populations compared to the populations in the urban heat islands likely impose stronger time constraints to reach a certain developmental stage before winter, thereby selecting for faster growth rates. In addition, higher predation rates at higher temperature may have contributed to the growth rate differences between urban and rural ponds. A faster-slower differentiation in TPCs may be a widespread pattern along the urbanization gradient. The observed microgeographic differentiation in TPCs supports the view that urbanization may drive life history evolution. Moreover, because of the urban heat island effect, urban environments have the potential to aid in developing predictions on the impact of climate change on rural populations.