Many business objectives related to performance, functionality, reliability and safety are affected by temperature. Most reliability protocols at present consider the steady state temperature the only stressor affecting reliability. Consequently, system designers often use temperature reduction as the primary means to improve reliability. However, is the steady state temperature indeed the dominant parameter? There is ample evidence that temperature gradients in space and time are far more important than the absolute temperature (see e.g. Lall et al., 1 Pecht, 2 Parry et al. 3 ). Section 7.2 will discuss a number of application fields for which time-dependent temperature measurements or predictions become increasingly important.Although a growing awareness of the importance of dynamic thermal effects has been lately noticed, the large majority of electronic system designers still believe that time constants of thermal effects are huge compared to those of electronic systems and hence, steady thermal analysis should be sufficient. This last statement is not always true. In fact, as will be proven both qualitatively and quantitatively in this chapter, there is an infinite set of thermal time constants. Some of them are quite comparable to those of electronic phenomena; others are quite larger. Whether or not should one consider dynamic thermal effects, depends on which problem is addressed.This chapter starts with a quick overview of cases where dynamic effects may be important. Then, fundamental aspects of transient modeling will first be introduced for a simple transient one-dimensional problem in order to gain physical understanding about basic notions involved. This will be followed by a well-known application: the structure function. It will then be generalized to fixed profile 3D problems. Next, a review of methods is proposed for constructing Dynamic Compact Thermal Models (DCTM). A general theoretical framework for transient problems with variable profiles will follow based on the same ideas given above for static problems. Some extensions will be briefly addressed in the last section.