Implementing permissive dehydration (DEH) during short-term heat acclimation (HA) may accelerate adaptations to the heat. However, HA with DEH may augment risk for acute kidney injury (AKI). This study investigated the effect of HA with permissive DEH on time-trial performance and markers of AKI. Fourteen moderately trained men (age and VO_2max = 25 ± 0.5 yr and 51.6 ± 1.8 mL^.kg^−1.min⁻¹) were randomly assigned to DEH or euhydration (EUH). Time-trial performance and VO_2max were assessed in a temperate environment before and after 7 d of HA. Heat acclimation consisted of 90 min of cycling in an environmental chamber (40 °C, 35% RH). Neutrophil gelatinase-associated lipocalin (NGAL) and kidney injury molecule-1 (KIM-1) were assessed pre- and post-exercise on day 1 and day 7 of HA. Following HA, VO_2max did not change in either group (p = 0.099); however, time-trial performance significantly improved (3%, p < 0.01) with no difference between groups (p = 0.485). Compared to pre-exercise, NGAL was not significantly different following day 1 and 7 of HA (p = 0.113) with no difference between groups (p = 0.667). There was a significant increase in KIM-1 following day 1 and 7 of HA (p = 0.002) with no difference between groups (p = 0.307). Heat acclimation paired with permissive DEH does not amplify improvements in VO_2max or time-trial performance in a temperate environment versus EUH and does not increase markers of AKI.