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Manufacturers of microelectronic devices often specify supply voltage limits and threshold values for power dissipation, output current, junction temperature, frequency. Being given these rated values, the designer often chooses to lower these specifications. This practice, known as "derating", has been perceived to provide increased reliability. Derating is a technique through which either stresses acting on a part are reduced or the strength of that part is increased by replacing it with a component with higher rated values. Stress derating and thermal analysis provided by CARE software tools assists the designer to make the best derating decisions - either to reduce the electrical or thermal stress of a specific component or to increase the stress rating of the part replacing it with a component with higher rated values. It allows the user to obtain several derating profiles and to select the optimum derating levels. This article presents a complete example of stress derating and thermal analysis for an electronic system, actually a temperature controller. Performing these steps before the components placement and manufacture of PCBs assures the proper component selection and saves redesign time. The importance of these analyses is to maximize the circuit performance and reliability parameters.