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Spatial variation in absolute climatic conditions (means, maxima or minima) is widely acknowledged to play a fundamental role in controlling species diversity patterns. In contrast, while evidence is accumulating that variability around mean climatic conditions may also influence species coexistence and persistence, the importance of spatial variation in temporal climatic variability for species diversity is still largely unknown. We used a unique dataset capturing fine-scale spatial heterogeneity in temperature variability across 2490 plots in southeast Australia to examine the comparative strength of absolute temperature and temperature variability in explaining spatial variation in plant diversity. Across all plots combined and in three of five forest types, temperature variability emerged as the better predictor of diversity. In all but one forest type, diversity also exhibited either a significant unimodal or positive linear correlation with temperature variability. This relationship is consistent with theory that predicts diversity will initially increase along a climate variability gradient due to temporal niche partitioning, but at an intermediary point, may decline as the risk of stochastic extinction exceeds competitive stabilization. These findings provide critical empirical evidence of a linkage between spatial variation in temporal climate variability and plant species diversity, and in light of changing climate variability regimes, highlight the need for ecologists to expand their purview beyond absolutes and averages.