Pulsed dye lasers equipped with cryogen spray cooling (CSC) are now widely used to treat vascular malformation such as port wine stains (PWSs). This paper presents a new integrated model that can quantitatively simulate the cooling of the skin and the heating of the targeted blood vessels in PWSs during laser treatment. The new model is based on the classical homogeneous multi-layer skin model that treats PWS-containing dermis as a mixture of dermal tissue and homogeneously distributed blood. Light propagation in skin and PWSs is simulated by a Monte-Carlo method, which provides accurate description of the light scattering and absorption in the skin. Thermal response of a targeted vessel in the new model is then obtained from the thermal analysis of a Krogh-unit that consists of the vessel and the surrounding dermal tissues and is buried in PWSs. The results from the multi-layer skin model provide appropriate laser influence input as well as the initial thermal condition for the micro-model of the Krogh-unit. A general dynamic relation is also introduced on the surface of skin to quantify the convective cooling of CSC. The model is then applied to dye-laser treatment (wavelength of 585 nm) of PWSs with CSC. Numerical results demonstrate that the present model is able to quantify thermal response of a deeply buried blood vessel in PWSs as a discrete blood vessel does, with a more realistically estimate of the sheltering effect of the dermal tissue (scattering) and blood vessels (absorption) in front of the targeted vessel. To understand the poor response of PWSs in clinic, the thermal characteristics of a targeted vessel was simulated under various conditions. The effects of two morphological parameters, the vessel diameter and the burying depth of the vessel, are then systematically investigated under various pulse durations and fluences of laser. A threshold fluence for given vessel diameter and depth is then estimated quantitatively under the condition of the optimal laser pulse duration. The results indicate that significant high threshold fluence is needed for large vessels buried deeply in the dermis, explaining the physics of the difficulty in clinic of complete clearance of PWSs. The results provide guidance to the clinic selection of the laser pulse duration and laser energy fluence for given PWSs.