The majority of the mosquito and parasite life-history traits that combine to determine malaria transmission intensity are temperature sensitive. In most cases, the process-based models used to estimate malaria risk and inform control and prevention strategies utilize measures of mean outdoor temperature. Evidence suggests, however, that certain malaria vectors can spend large parts of their adult life resting indoors. If significant proportions of mosquitoes are resting indoors and indoor conditions differ markedly from ambient conditions, simple use of outdoor temperatures will not provide reliable estimates of malaria transmission intensity. To date, few studies have quantified the differential effects of indoor vs outdoor temperatures explicitly, reflecting a lack of proper understanding of mosquito resting behaviour and associated microclimate. Published records from 8 village sites in East Africa revealed temperatures to be warmer indoors than outdoors and to generally show less daily variation. Exploring the effects of these temperatures on malaria parasite development rate suggested indoor-resting mosquitoes could transmit malaria between 0.3 and 22.5 days earlier than outdoor-resting mosquitoes. These differences translate to increases in transmission risk ranging from 5 to approaching 3,000%, relative to predictions based on outdoor temperatures. The pattern appears robust for low- and highland areas, with differences increasing with altitude. Differences in indoor vs outdoor environments lead to large differences in the limits and the intensity of malaria transmission. This finding highlights a need to better understand mosquito resting behaviour and the associated microclimate, and to broaden assessments of transmission ecology and risk to consider the potentially important role of endophily.