Extremely high temperatures represent one of the most severe abiotic stresses limiting crop productivity. However, understanding crop responses to heat stress is still limited considering the increases in both the frequency and severity of heat wave events under climate change. This limited understanding is partly due to the lack of studies or tools for the timely and accurate monitoring of crop responses to extreme heat over broad spatial scales. In this work, we use novel spaceborne data of sun‐induced chlorophyll fluorescence (SIF), which is a new proxy for photosynthetic activity, along with traditional vegetation indices (Normalized Difference Vegetation Index NDVI and Enhanced Vegetation Index EVI) to investigate the impacts of heat stress on winter wheat in northwestern India, one of the world's major wheat production areas. In 2010, an abrupt rise in temperature that began in March adversely affected the productivity of wheat and caused yield losses of 6% compared to previous year. The yield predicted by satellite observations of SIF decreased by approximately 13.9%, compared to the 1.2% and 0.4% changes in NDVI and EVI, respectively. During early stage of this heat wave event in early March 2010, the SIF observations showed a significant reduction and earlier response, while NDVI and EVI showed no changes and could not capture the heat stress until late March. The spatial patterns of SIF anomalies closely tracked the temporal evolution of the heat stress over the study area. Furthermore, our results show that SIF can provide large‐scale, physiology‐related wheat stress response as indicated by the larger reduction in fluorescence yield (SIF yield) than fraction of photosynthetically active radiation during the grain‐filling phase, which may have eventually led to the reduction in wheat yield in 2010. This study implies that satellite observations of SIF have great potential to detect heat stress conditions in wheat in a timely manner and assess their impacts on wheat yields at large scales.