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We present observations of the diurnal formation of horizontal temperature gradients in the surface waters of a sidearm of a small water supply reservoir at a time during summer when radiative heating and vertical stratification of the reservoir’s waters were both quite strong. Our measurements show that because the closed end of the sidearm was relatively shallow, daytime heating and nighttime cooling created larger temperature changes there than in the body of the lake, resulting in large horizontal temperature gradients that drove strongly sheared, horizontal exchanges. Because of more vigorous turbulent mixing during cooling, cooling‐driven flows were slower and of greater vertical extent than were heating‐driven flows. The overall flow exhibited inertia in that it was not in phase with the daily heating cycle. Averaged over the daily cycle, there appeared to be a net residual flow, with surface waters flowing out …