The engine coolant temperature influences fuel consumption, power, emissions and mechanical load on the components. The optimization of these variables does not permit a fixed temperature value if there are different speed and load states. The optimization requires a temperature range that corresponds to each operating point. Conventional wax thermostat has wide temperature control range as start to open and full open temperature values depends on mechanical properties of spring and wax material hence there is no control on coolant temperature band in real time. This Paper deals with performance analysis & optimization of engine cooling system by using electronically controlled coolant thermostat for improving engine thermal efficiency. For engine integration modification has been made in thermostat housing and radiator hose pipe. Controller was developed and programmed to control thermostat start to open to fully open temperature band with in acute range. The system has been evaluated by analyzing effect of raising coolant temperature to high temperature zone and controlling it in acute temperature band. Results shows good improvement in thermal efficiency and emissions.