A thermostat may include a housing, a user interface, temperature sensors providing temperature sensor measurements, and a processing system configured to control an HVAC system based on a comparison of a determined ambient temperature and a setpoint temperature. The thermostat may (i) determine time intervals in which direct sunlight is incident on the thermostat; (ii) during time intervals in which direct sunlight is not incident on the thermostat, process the temperature sensor measurements according to a first ambient temperature determination algorithm to compute the determined ambient temperature; and (iii) during time intervals in which it is determined that direct sunlight is incident on the thermostat, process the temperature sensor measurements according to a second ambient temperature determination algorithm to compute the determined ambient temperature that compensates for a heating of the thermostat caused by the direct sunlight.