Kelps are important foundation species in many cold-temperate coastal systems, and the loss of these organisms is a threat to ecosystem structure and function. The abundance of sugar kelp Saccharina latissima has recently declined in Northern Europe, which has been explained by increasing water temperature. We tested heat tolerance of sugar kelp exposed to simulated heatwave scenarios of 15, 18, 21 and 24°C for 3 wk, followed by a 2 wk recovery period at 15°C. Growth rate and photosynthetic performance decreased significantly with increasing temperature, while mortality remained low among treatments except at 24°C, where >90% of the algae died within a few days. Although exposure to 18 and 21°C had limited effect on mortality, kelps exposed to these temperatures had negative growth and continued to show impaired photosynthesis during the subsequent recovery period. Reductions in growth were strongly correlated to reduced carbon acquisition and, hence, photosynthetic performance, which was strongly correlated to heat-related changes in pigmentation. We suggest that reduced performance after exposure to elevated but non-lethal temperatures was caused by oxidative stress resulting from a discrepancy between light absorption and photosynthesis. Our results show that exposure to high but sub-lethal temperatures can have significant long-term effects, which may cause loss of biomass and leave sugar kelp susceptible to other stressors.