In this paper, an optimization study of molding compounds for a microelectromechanical systems (MEMS) sensor package has been performed. A comprehensive finite element analysis model was established for the MEMS sensor package to assess the stresses and deformations when the package was subjected to temperature loading. A series of stress relaxation tests were performed to characterize the viscoelastic material properties of a molding compound over temperature with dynamic mechanical analysis. A master curve for the molding compound was constructed by a proper shift function and the Prony pairs were obtained by curve fitting to be implemented in the simulation. To validate the simulation result, the thermal behavior of the MEMS package was measured. The digital image correlation technique was employed to observe the real-time deformation of the package exposed to temperature loading. The out-of-plane deformation of the package was compared with the simulation result. With the validated simulation model, the optimization study was conducted. By the process simulation, it has been shown that most of the thermal stress on the MEMS sensor chip was generated during the cooling process. Thus, a detailed cooling profile was developed by the transient heat analysis and applied to the parametric study. The modulus, coefficient of thermal expansion (CTE), and glass transition temperature (T g ) of molding compound were investigated. The result shows that a low modulus, low CTE, and low T g molding compound can minimize the thermal stress on MEMS sensor die.