The globally averaged diurnal temperature range (DTR) has shrunk since the mid-20th century, and climate models project further shrinking. Observations indicate a slowdown or reversal of this trend in recent decades. Here, we show that DTR has a minimum for average temperatures close to 0C. Observed DTR shrinks strongly at colder temperature, where warming shifts the average temperature towards the DTR minimum, and expands at warmer temperature, where warming shifts the average temperature away from the DTR minimum. Most, but not all climate models reproduce the minimum DTR close to 0C and a stronger DTR shrinking at colder temperature. In models that reproduce the DTR minimum close to 0C, DTR shrinking slows down significantly in recent decades. Model projections suggest that the DTR will resume or continue shrinking over the 21st century.