In the summer of 2007, physical measurements including velocity from acoustic Doppler current profilers, surface gravity wave heights measured acoustically, and temperature from thermistor chain arrays were collected along- and across- the mid to inner shelf (water depths from 10–60 m) in northern Monterey Bay. The oceanic response to a strong (8–15 m s−1 daily maximum) along-shelf sea breeze is examined by evaluating the diurnal heat budget over a cross-shelf section of the inner shelf. The diurnal heat budget closes to within the 95% confidence level with daily warming and cooling periods explained by two separate, but related processes. During evening/early morning warming period, 77% of the observed temperature increase is due to along-shelf advection of a temperature gradient within the upwelling shadow zone, a process which is arrested during the period of wind-forcing. In contrast, 75% of the afternoon cooling period is explained by the cross-shelf heat flux driven by diurnal along-shelf winds. In this study, diurnal tides are found to contribute less than 10% of the observed temperature variability and surface gravity waves do not show any significant diurnal variability. Richardson number estimates show that, on average, wind-induced shear is not strong enough to erode the strength of water column stratification within the upwelling shadow.