How organisms respond to increasing temperatures could be attributed to existing thermal tolerances or that certain populations are living well below their thermal limits. To address these ideas, we exposed geographically distinct (1144–2332 km apart) lineages of the dominant reef-building crustose coralline alga, Porolithon cf. onkodes, from the Australian Great Barrier Reef and Lord Howe Island to an increasing temperature (1 °C h−1) experiment, where individual average oxygen production was measured continuously. Molecular phylogenetic analysis revealed the existence of hidden lineages within this alga, but individuals are morpho-anatomically identical. The tropical, low latitude lineage supported the climate variability hypothesis, in which some populations existing in already warmer and more stable thermal environments may be living at or near their thermal thresholds. On average, there was a ~ 92% decrease in O2 produced after a 1 °C increase in the tropical, low latitude lineage. However, the high latitude lineage did not support this hypothesis, as individuals continuously decreased the amount of O2 produced with increasing temperature. The central lineage responded uniquely, maintaining a stable level of O2 for almost 5 °C above their acclimation temperature. Our results indicate that the climate variability hypothesis only partially explains the thermal tolerance in this alga, and we suggest local oceanographic processes, latitudinal effects, and importantly, cryptic speciation influences the responses of different lineages of the critically important reef-building alga P. cf. onkodes to rising temperatures.