Lubricant viscosity along the engine cylinder liner varies by an order of magnitude due to local temperature variation and vaporization effects. Tremendous potential exists for fuel economy improvement by optimizing local viscosity variations for specific operating conditions. Methods for analytical estimation of friction and wear in the power-cylinder system are reviewed and used to quantify opportunities for improving mechanical efficiency and fuel economy through lubricant formulation tailored specifically to liner temperature distributions. Temperature dependent variations in kinematic viscosity, density, shear thinning, and lubricant composition are investigated. Models incorporating the modified Reynolds equation were used to estimate friction and wear under the top ring and piston skirt of a typical 11.0 liter diesel engine. Friction losses were analyzed in the liner local position and temperature domains, and practical considerations for obtaining optimal viscosity profiles are reviewed with regard to the limitations of viscosity modifiers. The study extends friction and wear modeling techniques to consider local temperature dependent composition changes. Specifically, oil consumption, viscosity, and friction models were coupled to account for the effect of rheological changes along the liner due to oil vaporization. Potential wear mitigation opportunities available through base oil formulation are presented. Results suggest significant friction and wear benefits may still be obtained through lubricant formulation tailored specifically to engine temperature variations.