Temperature and geologic data from over 3000 oil and gas wells within a 180 km × 30 km area that transect across the southern Powder River Basin in Wyoming, U.S.A., were used to determine the present thermal regime of the basin. Three-dimensional temperature fields within the transect, based on corrected bottomhole temperatures (BHTs) and other geologic information, were assessed using: (1) A laterally constant temperature gradient model in conjunction with an L1 norm inversion method, and (2) a laterally variable temperature gradient model in conjunction with a stochastic inversion technique. The mean geothermal gradient in the transect is 29°C/km, but important lateral variations in the geothermal gradient exist. The average heat flow for the southern Powder River Basin is 52mW/m2 with systematic variations between 40mW/m2 and 60mW/m2 along the transect. Extremely high local heat flow (values up to 225mW/m2) in the vicinity of the Teapot Dome and the Salt Creek Anticline and low heat flow of 25mW/m2 occurring locally near the northeast end of the transect are likely caused by groundwater movement.