In order to predict the long-term consequences of climate change, it is necessary to link future environmental changes to mechanisms that control plant population processes. This information can then be incorporated into strategies to more accurately model climate change impacts on species or to estimate future extinction risks. We examined the impact of increased temperatures on the longevity and dynamics of the persistent soil seed banks of eight ephemeral species from arid Australia. We found that the predicted global temperature increases under climate change will be reflected in increased soil temperatures, and that seeds in the soil seed bank will be exposed to long durations of high temperatures over the summer months. Three of the eight species studied had significantly greater levels of germination after exposure to predicted increased soil temperatures. Another species displayed a dramatic decrease in seed viability after such exposure. The capacity of such species to use the seed bank to bet hedge against rainfall events that cause germination but are insufficient to allow plant maturation, is compromised by increased germinability and subsequent loss or reduction of seed bank persistence. These predicted changes in the dynamics of soil seed banks increase the risk of local extinctions of these species, while the composition of the community may be altered by changes in species abundance. Our results show that the risk spreading mechanism provided by persistent seed banks could be compromised by the mechanistic impact of forecast temperature increases in arid habitats, and highlight the need to understand mechanisms that control population dynamics when attempting to address likely future impacts of climate change on biodiversity.