High-resolution gridded datasets are in high demand because they are spatially complete and include important finescale details. Previous assessments have been limited to two to three gridded datasets or analyzed the datasets only at the station locations. Here, eight high-resolution gridded temperature datasets are assessed two ways: at the stations, by comparing with Global Historical Climatology Network–Daily data; and away from the stations, using physical principles. This assessment includes six station-based datasets, one interpolated reanalysis, and one dynamically downscaled reanalysis. California is used as a test domain because of its complex terrain and coastlines, features known to differentiate gridded datasets. As expected, climatologies of station-based datasets agree closely with station data. However, away from stations, spread in climatologies can exceed 6°C. Some station-based datasets are very likely biased near the coast and in complex terrain, due to inaccurate lapse rates. Many station-based datasets have large unphysical trends (>1°C decade−1) due to unhomogenized or missing station data—an issue that has been fixed in some datasets by using homogenization algorithms. Meanwhile, reanalysis-based gridded datasets have systematic biases relative to station data. Dynamically downscaled reanalysis has smaller biases than interpolated reanalysis, and has more realistic variability and trends. Dynamical downscaling also captures snow–albedo feedback, which station-based datasets miss. Overall, these results indicate that 1) gridded dataset choice can be a substantial source of uncertainty, and 2) some datasets are better suited for certain applications.