Effective thermal management is critical to the successful design of small solid oxide fuel cell (SOFC) power systems. While separate unit processes occur within each component of the system, external heat transport from/to components must be optimally managed and taken into account in system-level design. In this paper, we present a modeling approach that captures thermal interactions among hot zone components and couples this information with system process design. The resulting thermal model is then applied to a mobile SOFC power system concept in the 1–2 kW range to enable a better understanding of how component heat loss affects process gas temperature and flow requirements throughout the flowsheet. The thermal performance of the system is examined for various thermal management strategies that involve altering the convective and radiative heat transfer in the enclosure. The impact of these measures on internal temperature distributions within the cell-stack is also presented. A comparison with the results from traditional adiabatic, zero-dimensional thermodynamic system modeling reveals that oxidant flow requirements can be overpredicted by as much as 204%, resulting in oversizing of recuperator heat duty by 221%, and that important design constraints, such as the magnitude of the maximum cell temperature gradient within the stack, are underpredicted by over 24%.