As ocean temperatures increase, so does the need for accurate, regular, and widespread temperature data. This is especially important for researchers studying corals, which can be pushed over their bleaching thresholds by small, sustained changes in water temperature. Satellite data products offer longitudinal estimates of sea surface temperature (SST) taken at regular intervals without the ongoing costs and geospatial limits associated with underwater temperature loggers. However, previous work indicates satellite data are sometimes characterized by significant temperature biases, particularly in stratified coastal waters. Here, we compared the foundation sea surface temperature (fSST) estimated from a highly processed, gridded satellite data set (GHRSST MUR L4 Global SST) to in situ temperature (IST) data collected from coral reef habitats in the top 20 m of the water column at 19 sites in Panama. Comparisons between Pacific and Caribbean coasts and between upwelling and non-upwelling seasons provide a robust test of the utility of this product to estimate subsurface temperatures. The mean differences between fSST and IST show that MUR fSST accurately reflects temperatures at shallow (<9 m) depths on the Caribbean coast (mean bias ≤0.55°C ± standard error (SE) 0.01°C) and during the non-upwelling season on the Pacific coast (mean bias ≤0.26°C ± SE 0.03°C). MUR fSST poorly reflects IST during the Pacific upwelling season, especially at sites 12 m and deeper. In such cases, 66% of satellite estimates deviated from ISTs by >1°C. Our findings underscore how highly processed SST data products should be ground-truthed before being used as a substitute for IST, especially in upwelling areas.