This paper presents a simulation study to evaluate the combined effect of cutting depth (drilling rate) and wear (bit dull) on the thermal response of polycrystalline diamond compact (PDC) cutters under downhole drilling conditions. A new understanding of frictionally generated heat between rock and PDC cutter is introduced from the analysis of forces active on the wearflat and the cutting (leading) surfaces of a cutter. Then this new concept is used to predict PDC bit performance with the controlled temperature of its cutters. Previous concepts, largely based on the laboratory drilling tests (with low drilling rate and under atmospheric conditions), recognize only one source of heat-the wearflat surface. However, this study, using field data, shows that the heat generated at the cutting surface may significantly contribute to the total heat flux in the cutter. As a result, the distribution of temperature within the cutter is changed, which particularly affects the maximum value of temperature at the cutting edge. A simplified 2-D finite difference numerical code is used to quantify the difference in cutter wearflat temperatures calculated with and without the additional heat flux generated at the cutting surface. The numerical analysis reveals that neglecting the cutting surface effect results in underestimation of the actual wearflat temperature by 10 to 530 percent, depending upon bit dull and downhole hydraulics. Also demonstrated is the actual impact of these findings on field drilling practices. The example comparison is made by calculating the optimal-control procedures for PDC bit with and without the effect of cutting surface. In these procedures, wearflat temperature becomes a mathematical constraint which limits weight on bit and rotational speed. The comparison includes calculation of the maximum bit performance curves which represent maximum drilling rate attainable for a bit to drill a predetermined length of a borehole (footage). The curves show an up to 18 percent reduction of drilling rate when the new and more rigorous temperature limitation is used. In addition, the example calculations show that the actual temperature of the bit cutters can be 460-degrees-C (860-degrees-F), and exceeds by almost 30 percent its maximum acceptable value of 350-degrees-C (660-degrees-F). For practical applications, the study reveals that many field failures of PDC bits may have been caused by lack of understanding of operational limits imposed by heat considerations.