The adaptive potential of livestock under a warming climate is increasingly relevant in relation to the growing pressure of global food security. Studies on heat tolerance demonstrate the interplay of adaptation and acclimatization in functional traits, for example, a reduction in body size and enhanced tolerance in response to a warming climate. However, current lack of understanding of functional traits and phylogenetic history among phenotypically distinct populations constrains predictions of climate change impact. Here, we demonstrate evidence of parallel evolution in adaptive tolerance to heat stress in dwarf cattle breeds (DCB, Bos taurus indicus) and compare their thermoregulatory responses with those in standard size cattle breeds (SCB, crossbred, Bos taurus indicus × Bos taurus taurus). We measured vital physiological, hematological, biochemical, and gene expression changes in DCB and SCB and compared the molecular phylogeny using mitochondrial genome (mitogenome) analysis. Our results show that SCB can acclimatize in the short term to higher temperatures but reach their tolerance limit under prevailing tropical conditions, while DCB is adapted to the warmer climate. Increased hemoglobin concentration, reduced cellular size, and smaller body size enhance thermal tolerance. Mitogenome analysis revealed that different lineages of DCB have evolved reduced size independently, as a parallel adaptation to heat stress. The results illustrate mechanistic ways of dwarfing, body size-dependent tolerance, and differential fitness in a large mammal species under harsh field conditions, providing a background for comparing similar populations during global climate change. These demonstrate the value of studies combining functional, physiological, and evolutionary approaches to delineate adaptive potential and plasticity in domestic species. We thus highlight the value of locally adapted breeds as a reservoir of genetic variation contributing to the global domestic genetic resource pool that will become increasingly important for livestock production systems under a warming climate.