Rates of urbanization are accelerating worldwide. The increases in temperature associated with ‘urban heat island’ effects provide both an ecological imperative and a unique opportunity to explore the ecological and evolutionary mechanisms that underlie organismal responses to rapid environmental change. We used the acorn ant, Temnothorax curvispinosus (Mayr 1866), to compare shifts in thermal tolerance of ants from rural and urban habitats throughout Cleveland, USA. Urban warming in the region has been ongoing for the past century which translates to 20 or fewer acorn ant generations. Using a common garden experiment, we found gains in the ability to withstand high temperatures and losses in the ability to withstand cool temperatures among ants in urban habitats. Owing to the greater magnitude of phenotypic change in lower compared with upper tolerances, tolerance breadth decreased in urban habitats. Mechanistically, these shifts in thermal tolerance under urbanization reflected both evolutionary change and phenotypic plasticity, as ants from urban areas exhibited higher thermal tolerances compared with ants from rural areas regardless of rearing temperature, and ants reared in the warmer temperature treatment exhibited higher tolerances than ants reared in the cooler temperature treatment. We also found evidence of evolved plasticity as the slope of the response to warmer and colder rearing environments differed significantly among rural and urban populations. While much of the ecological forecasting literature focuses on plastic responses to environmental change, our study provides evidence of rapid evolution of thermal tolerances, and suggests the importance of including evolutionary responses in forecasts of organismal responses to climatic change.