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The early Paleogene (56–48 Myr) provides valuable information about the Earth’s climate system in an equilibrium high pCO2 world. High ocean temperatures have been reconstructed for this greenhouse period, but land temperature estimates have been cooler than expected. This mismatch between marine and terrestrial temperatures has been difficult to reconcile. Here we present terrestrial temperature estimates from a newly calibrated branched glycerol dialkyl glycerol tetraether-based palaeothermometer in ancient lignites (fossilized peat). Our results suggest early Palaeogene mid-latitude mean annual air temperatures of 23–29 °C (with an uncertainty of ± 4.7 °C), 5–10 °C higher than most previous estimates. The identification of archaeal biomarkers in these same lignites, previously observed only in thermophiles and hyperthermophilic settings, support these high temperature estimates. These mid-latitude terrestrial temperature estimates are consistent with reconstructed ocean temperatures and indicate that the terrestrial realm was much warmer during the early Palaeogene than previously thought.