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Abstract In this work, we investigate the effect of areawide building retrofitting on summertime, street-level outdoor temperatures in an urban district in Berlin, Germany. We perform two building-resolving, weeklong large-eddy simulations: one with nonretrofitted buildings and the other with retrofitted buildings in the entire domain to meet today’s energy efficiency standards. The comparison of the two simulations reveals that the mean outdoor temperatures are higher with retrofitted buildings during daytime conditions. This behavior is caused by the much smaller inertia of the outermost roof/wall layer in the retrofitting case, which is thermally decoupled from the inner roof/wall layers by an insulation layer. As a result, the outermost layer heats up more rigorously during the daytime, leading to increased sensible heat fluxes into the atmosphere. During the nighttime, the outermost layer’s temperature drops down faster, resulting in cooling of the atmosphere. However, as the simulation progresses, the cooling effect becomes smaller and the warming effect becomes larger. After 1 week, we find the mean temperatures to be 4 K higher during the daytime while the cooling effects become negligible. Significance Statement Building retrofitting is taking place in Europe and other continents as a measure to reduce energy consumption. The change in the building envelope directly influences the urban atmosphere. Our study reveals that areawide retrofitting in a German city district can have negative effects on the outdoor microclimate in summer by causing higher air temperatures.