Sugarcane area is currently expanding in Brazil, largely in response to domestic and international demand for sugar-based ethanol. To investigate the potential hydroclimatic impacts of future expansion, a regional climate model is used to simulate 5 years of a scenario in which cerrado and cropland areas (~1.1E6 km2) within south-central Brazil are converted to sugarcane. Results indicate a cooling of up to ~1.0°C during the peak of the growing season, mainly as a result of increased albedo of sugarcane relative to the previous landscape. After harvest, warming of similar magnitude occurs from a significant decline in evapotranspiration and a repartitioning toward greater sensible heating. Overall, annual temperature changes from large-scale conversion are expected to be small because of offsetting reductions in net radiation absorption and evapotranspiration. The decline in net water flux from land to the atmosphere implies a reduction in regional precipitation, which is consistent with progressively decreasing simulated average rainfall for the study period, upon conversion to sugarcane. However, rainfall changes were not robust across three ensemble members. The results suggest that sugarcane expansion will not drastically alter the regional energy or water balance, but could result in important local and seasonal effects.