The Nile Delta is the most vital region of the desert-dominated country of Egypt. Due to its prominent level of vulnerability to climate change’s negative impacts and its low capacity for adaptation and mitigation, the current study aims to provide accurate quantification of temperature change across the Nile Delta as an integral basis for sustainability and climate change impacts assessment studies. This was achieved through monitoring urban dynamics and detecting LST trends in 91 cities and their rural surroundings. The relevant local urban bias was discriminated from regional/background changes present in diurnal/nocturnal temperature records. The temperature records were then corrected/adjusted by removing this urban bias. Owing to the insufficiency of ground-based meteorological observatories, the investigation utilized moderate resolution imaging spectroradiometer (MODIS) land surface temperatures (LSTs) and Landsat-based datasets (2000–2021). The widely used Mann–Kendall test (MKT) and Theil–Sen estimator (TSE) were employed to assess trends in urban sprawl, LST time series, and the implied association. The analysis revealed that the region has experienced dramatic urbanization, where the total urban expansion was greater than two-thirds (69.1%) of the original urban area in 2000. This was accompanied by a notable warming trend in the day/night and urban/rural LST records. The nocturnal LST exhibited a warming tendency (0.072 °C year−1) larger than the diurnal equivalent (0.065 °C year−1). The urban dynamics were positively correlated with LST trends, whereas the Mediterranean Sea appeared as a significant anti-urbanization moderator, in addition to the Nile River and the prevailing northerly/northwesterly winds. The urban–rural comparison approach disclosed that the urbanization process caused a warming bias in the nighttime LST trend by 0.017 °C year−1 (21.8%) and a cooling bias in the daytime by −0.002 °C year−1 (4.4%). All results were statistically significant at a confidence level of 99%. It is recommended that studies of climate-related sustainability and climate change impact assessment in the Nile Delta should apply a distinction of urban-induced local effect when quantifying the actual regional temperature change.