Scaling down of ICs and the increased packaging densities resulted in increased concern about thermal issues during the design of ICs and their packages. In this paper newly developed design and testing methods ale presented. The SISSSI electro-thermal simulator pl edicts the layout dependent electro-thermal behaviour of circuits. The presented CMOS temperature sensors and the idea of DfTT designs assure on-line temperature monitoring of circuits and packages. The also presented thermal transient testing method enables accurate thermal characterization of packages both for design and verification purposes. The capabilities of the new tools are demonstrated with application examples.