Sea surface temperatures (SSTs) from five coastal sites around New Zealand were compared with SST products from satellite AVHRR (Advanced Very High Resolution Radiometer) measurements between mid 1989 and late 1994. The objectives of this analysis were to test the accuracy and stability of the AVHRR product, and to distinguish how the coastal SST measurements represent the larger coastal areas which the satellite product measures. The AVHRR product is comparable with the coastal data up until mid 1991, after which the AVHRR product is colder by approximately 1°C. The difference peaked in late 1992 and probably died away by late 1993. This may be a result of the eruptions of Mt Pinatubo (June 1991) and/or Cerro Hudson (August 1991). The coastal measurements from relatively exposed sites are representative of the larger coastal regions measured by the satellites. In the case of more enclosed waters, particularly within harbours, the long‐term means of the coastal and AVHRR measurements agree before mid 1991, but the coastal measurements have larger seasonal cycles.