The oceanic response to high‐frequency local diurnal wind forcing is examined in a small coastal embayment located along an understudied stretch of the central California coast. We show that local diurnal wind forcing is the dominant control on nearshore temperature variability and circulation patterns. A complex empirical orthogonal function (CEOF) analysis of velocities in San Luis Obispo Bay reveals that the first‐mode CEOF amplitude time series, which accounts for 47.9% of the variance, is significantly coherent with the local wind signal at the diurnal frequency and aligns with periods of weak and strong wind forcing. The diurnal evolution of the hydrographic structure and circulation in the bay is examined using both individual events and composite‐day averages. During the late afternoon, the local wind strengthens and results in a sheared flow with near‐surface warm waters directed out of the bay and a compensating flow of colder waters into the bay over the bottom portion of the water column. This cold water intrusion into the bay causes isotherms to shoal toward the surface and delivers subthermocline waters to shallow reaches of the bay, representing a mechanism for small‐scale upwelling. When the local winds relax, the warm water mass advects back into the bay in the form of a buoyant plume front. Local diurnal winds are expected to play an important role in nearshore dynamics and local upwelling in other small coastal embayments with important implications for various biological and ecological processes.



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