A method of sensing an internal temperature of a differential carrier includes providing a differential carrier temperature sensing package with an electronic circuit board having a first temperature sensor that is in thermally conductive contact with a thermal conductor, where the thermal resistance of the package and thermal conductor is given and known as RENC. The package is extended through an opening in a differential carrier that has a fluid in it. The first temperature sensor senses a differential fluid temperature TSNS. The electronic circuit board further has a second temperature sensor, whereby the thermal resistance of the circuit board is a given known resistance RPCB. The second temperature sensor senses an internal package temperature TPCB within the package. Consequently, an internal temperature of the differential is calculated from the equation: TINT=TSNS(1+RENC/RPCB)−TPCB(RENC/RPCB).