Temperature plays an important role in determining the breeding phenology of birds in temperate climates, with higher spring temperatures associated with earlier breeding. However, the effect of localised territory-scale temperature variations is poorly understood, with relationships between temperature and breeding phenology mostly studied using coarse-grained climatic indices. Here, we interpolate spring temperatures recorded at 150-m 2 grid intersections encompassing 417 ha of forest to examine the influence of territory-scale temperature, and its interaction with mean annual temperature, on territory selection, breeding phenology, clutch size and fledging success for three co-occurring single-brooded passerine birds using data from 672 nests over four years. All species exhibited significant trends in reproductive traits associated with territory-scale temperature. Pied flycatchers Ficedula hypoleuca settled in cooler territories first, where they raised more fledglings. Blue tits Cyanistes caeruleus laid larger clutches in warmer territories in warm years and always laid earlier at warmer territories irrespective of annual temperature variation. Contrastingly, pied flycatcher and wood warbler Phylloscopus sibilatrix breeding phenology was earlier at warmer territories in cool years and cooler territories in warm years, with wood warbler clutch size responding similarly to this interaction. Greater previous breeding experience and higher rates of historical territory occupancy (territory quality) also predicted earlier breeding phenology and higher fledging success for pied flycatchers. We suggest that the migratory pied flycatcher and wood warbler are best synchronised with their prey availability in cooler years at a local population level. However resident blue tits match local phenology across all years, which is potentially advantageous under warmer predicted climate change scenarios. We conclude that temperature at the territory scale can be an important driver of settlement and breeding phenology and influence reproductive traits.