The thermal behavior of semiconductor devices fabricated with a variety of different materials has been analyzed using the three-dimensional transmission-line matrix (TLM) method. This method can easily incorporate the temperature dependence of thermal parameters, is numerically stable, and compares favorably with other numerical techniques in computational expenditure and convenience in modeling complex geometries. As an example, a three-dimensional thermal analysis of a typical microwave power device structure is presented. The model demonstrates the effects of overlay metal and conductivity of the substrate material in limiting the temperature rise. Both the transient and steady-state thermal operation are quantitatively studied. The study shows that the TLM method has considerable potential in the thermal analysis and design of semiconductor devices.