Respiration by plants and microorganisms is primarily responsible for mediating carbon exchanges between the biosphere and atmosphere. Climate warming has the potential to influence the activity of these organisms, regulating exchanges between carbon pools. Physiological ‘down-regulation’ of warm-adapted species (acclimation) could ameliorate the predicted respiratory losses of soil carbon under climate change scenarios, but unlike plants and symbiotic microbes, the existence of this phenomenon in heterotrophic soil microbes remains controversial. Previous studies using complex soil microbial communities are unable to distinguish physiological acclimation from other community-scale adjustments. We explored the temperature-sensitivity of individual saprotrophic basidiomycete fungi growing in agar, showing definitively that these widespread heterotrophic fungi can acclimate to temperature. In almost all cases, the warm-acclimated individuals had lower growth and respiration rates at intermediate temperatures than cold-acclimated isolates. Inclusion of such microbial physiological responses to warming is essential to enhance the robustness of global climate-ecosystem carbon models.