Alleviating the urban heat island effect is of great significance to improve thermal comfort, energy saving and carbon reduction, and realize sustainable urban development. At present, several methods are developed to investigate urban heat island effect, including meteorological observation data analysis, mesoscale WRF numerical simulation and remote sensing image analysis, etc. Among them, remote sensing image is widely used in the comparative study of heat island effect in different urban development periods. The local climate zone theory (LCZs), proposed by Stewart and Oke (Bull Am Meteorol Soc 93:1879–1900, 2012) provides a new tool for the downscaling study of urban heat island effect and forms a systematic classification scheme for different urban forms and surface landscapes. The results currently using LCZs to study the heat island effect, usually illustrate the horizontal differentiation at pedestrian level. However, the high-rise compact urban canopy of megacities in China is characteristic of three-dimensional space pattern, leading to the three dimensional differentiation of urban thermal and wind environment. Together with the local climate zones, the two-layer analysis scheme of the surface building-vegetation mixing layer and high building effect layer is thus proposed in this short review to understand the three-dimensional differentiation of urban canopy. This two-layer analysis scheme will provide a new insight for the study of urban heat islands and heat mitigation, deepening the existing local climate zone theory.