A three-dimensional model is developed to simulate and compare heat generation and transport within a lithium polymer electrolyte battery under galvanostatic discharges and a dynamic power profile [the Simplified Federal Urban Driving Schedule (SFUDS)]. Emphasis is placed on the maintenance of the operational temperature and temperature uniformity within a battery by designing a suitable thermal management system. The results indicate that the anisotropic thermal conductivity within the battery is an important factor influencing thermal performance and should be taken into consideration in battery design. On the one hand, because of the low effective thermal conductivity across a laminated cell stack, steep temperature distributions may be caused if cooling channels or electric heaters are placed at the two ends of a cell stack. On the other hand, the relatively large average thermal conductivity along the width and height directions allows more efficient heat removal or addition, and thus facilitates the maintenance of uniform operating temperature. Under the SFUDS power profile, the time-averaged heat generation rate is low, and therefore a high-performance insulation material is required to maintain the operating temperature. The thermal model has been applied to study the effectiveness of different arrangements of cooling channels and electric heaters and to select suitable heating intensities and insulating materials.