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Microsites are created by abiotic and biotic features of the landscape and may provide essential habitats for the persistence of biota. Forest canopies and understorey plants may moderate wind and solar radiation to create microclimatic conditions that differ considerably from regional climates. Skirt‐forming plants, where senescent leaves create hut‐like cavities around the stem, create microsites that are sheltered from ambient conditions and extreme weather events, constituting potential refuges for wildlife. We investigate day and night temperatures and humidity for four locations (grass tree cavities, soil, 20 cm above‐ground, 1 m above‐ground) in a South Australian forest with relatively open canopy of stringybark eucalypts (Eucalyptus baxteri, E. obliqua) and an understorey of skirt‐forming grass trees (Xanthorrhoea semiplana) at 5, 10, 20, and 40 m from the forest edge. We also measured the percentage of canopy and understorey covers. Generally, temperature and humidity differed significantly between more sheltered (grass tree cavities, soil) and open‐air microsites, with the former being cooler during the day and warmer and more humid during the night. Furthermore, our results suggest that canopy cover tends to decrease, and understorey cover tends to increase, the temperature of microsites. Distance to the edge was not significantly related to temperature for any microsite, suggesting that the edge effect did not extend beyond 10 m from the edge. Overall, grass trees influenced microclimatic conditions by forming a dense understorey and providing cavities that are relatively insulated. The capacity of grass tree cavities to buffer external conditions increased linearly with ambient temperatures, by 0.46°C per degree increase in maximum and 0.25°C per degree decrease in minimum temperatures, potentially offsetting climate warming and enabling persistence of fauna within their thermal limits. These climate moderation properties will make grass trees increasingly important refuges as extreme weather events become more common under anthropogenic climate change. [ABSTRACT FROM AUTHOR]