Extreme heatwaves and drought have been shown to significantly affect urban tree survival, with potentially substantial economic costs for urban managers and local governments. During the 2019–2020 austral summer, the western Sydney Local Government Area (LGA) of Penrith experienced unprecedented high temperatures with less than 60 % of average rainfall compared with the proceeding five summers. This culminated in the highest temperature ever recorded in greater Sydney, of 48.9 °C. It is increasingly important that trees for urban applications are selected to be able to withstand such conditions. In early 2020, we conducted a visual assessment of canopy damage on street trees found in the Penrith LGA following the 2019–2020 summer heatwaves. We assessed the health of over 5500 trees and classified them as undamaged, lightly damaged, heavily damaged or defoliated. We found that more than 10 % of all the trees assessed displayed some level of canopy damage, with exotic deciduous species showing the greatest proportion of canopy damage. A logistic regression revealed that for exotic deciduous species, the probability of having sustained no canopy damage was 79 % lower than that for native evergreen species. Using these data, the economic costs to replace damaged trees was calculated using two scenarios that incorporated costs of tree planting and maintenance: low cost (replacing all heavily damaged and defoliated trees with juvenile trees) and high cost (replacing all heavily damaged and defoliated trees with advanced trees), with costs ranging from $500,000 to $800,000 (AUD). We also calculated the cost of replacing all individuals of the most damaged species with more climate-resilient species in order to secure the urban forest and found that the cost would be over AUD$1,000,000. This research highlights the importance of careful planning to ensure urban forest resilience and economic sustainability in the face of climate change.