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Stream temperatures have been increasing worldwide, in some cases reaching unsustainable levels for aquatic life. Riparian revegetation has been identified as a strategy for managing stream temperatures by blocking direct solar radiation. In this study, the effects of riparian vegetation on stream temperatures were included within the Soil & Water Assessment Tool (SWAT) model through a shade factor parameter. An equilibrium temperature approach was used to integrate the shade factor in an energy balance context. The stream temperature sub-model was improved using the new energy balance equation and integrated into SWAT. Unlike existing models, the modified SWAT model enables improved representation of two processes – mass and heat transfer – that influence stream temperature change and enables simulation of shading and its effects on stream temperatures at sub-basin scales. The updated SWAT model was tested in Dairy McKay Watershed, OR, USA, for four scenarios: current conditions of riparian vegetation, full restoration, efficient restoration, and no vegetation. The model calibration under current riparian vegetation showed good performance (Nash–Sutcliffe efficiency NSE > 0.74). Stream temperature reduction and number of days with stream temperatures above survival limits (NDSTASL) for aquatic species were also evaluated as measures of riparian shade performance. Findings showed average temperature reductions of 0.91 ∘C (SD = 0.69 ∘C) and reductions in NDSTASL of 17.1 d over a year for full riparian restoration and average reductions of 0.86 ∘C (SD = 0.67 ∘C) and 16.2 d for efficient restoration. Notwithstanding the similar benefits, efficient restoration was 14.4 % cheaper than full riparian vegetation restoration.