Analyses of meteorites and theoretical models indicate that some carbonaceous near-Earth asteroids may have been thermally altered due to radiative heating during close approaches to the Sun1–3. However, the lack of direct measurements on the subsurface doesn’t allow us to distinguish thermal alteration due to radiative heating from parent-body processes. In April 2019, the Hayabusa2 mission successfully completed an artificial impact experiment on the carbonaceous near-Earth asteroid (162173) Ryugu4,5, which provided an opportunity to investigate exposed subsurface material and test potential effects of radiative heating. Here we report observations of Ryugu’s subsurface material by the Near-Infrared Spectrometer (NIRS3) on the Hayabusa2 spacecraft. Reflectance spectra of excavated material exhibit a hydroxyl (OH) absorption feature that is slightly stronger and peak-shifted compared with that observed for the surface, indicating that space weathering and/or radiative heating have caused subtle spectral changes in the uppermost surface. The strength and shape of the OH feature suggests that the subsurface material experienced heating above 300 °C, similar to the surface. In contrast, thermophysical modelling indicates that radiative heating cannot increase the temperature above 200 °C at the estimated excavation depth of 1 m, even at the smallest heliocentric distance possible for Ryugu. This supports the hypothesis that primary thermal alteration occurred on Ryugu’s parent body.