As is true in many regions, India experiences surface Urban Heat Island (UHI) effect that is well understood, but the causes of the more recently discovered Urban Cool Island (UCI) effect remain poorly constrained. This raises questions about our fundamental understanding of the drivers of rural-urban environmental gradients and hinders development of effective strategies for mitigation and adaptation to projected heat stress increases in rapidly urbanizing India. Here we show that more than 60% of Indian urban areas are observed to experience a day-time UCI. We use satellite observations and the Community Land Model (CLM) to identify the impact of irrigation and prove for the first time that UCI is caused by lack of vegetation and moisture in non-urban areas relative to cities. In contrast, urban areas in extensively irrigated landscapes generally experience the expected positive UHI effect. At night, UHI warming intensifies, occurring across a majority (90%) of India’s urban areas. The magnitude of rural-urban temperature contrasts is largely controlled by agriculture and moisture availability from irrigation, but further analysis of model results indicate an important role for atmospheric aerosols. Thus both land-use decisions and aerosols are important factors governing, modulating, and even reversing the expected urban-rural temperature gradients.