The thermal efficiency () is a dimensionless performance measure of a thermal device such as an internal combustion engine, a boiler, or a furnace, for example.

The input, , to the device is heat, or the heat-content of a fuel that is consumed. The desired output is mechanical work, , or heat, , or possibly both. Because the input heat normally has a real financial cost, a memorable, generic definition of thermal efficiency is

From the first and second law of thermodynamics, the output can not exceed what is input, so

When expressed as a percentage, the thermal efficiency must be between 0% and 100%. Due to inefficiencies such as friction, heat loss, and other factors, thermal efficiencies are typically much less than 100%. For example, a typical gasoline automobile engine operates at around 25% thermal efficiency, and a large coal-fueled electrical generating plant peaks at about 36%. In a combined cycle plant thermal efficiencies are approaching 60%.