In order to study the heat and power conversion efficiency of diesel engine with different coolant temperatures, an engine and cooling system co-simulation model was built based on the first law of thermodynamics. This model was established by GT—Suite software to simulate the interaction of engine and cooling system performance parameters. A heat balance experiment of DEUTZ TCD8V2015 diesel engine was designed and executed, and the model was verified by the experimental data. Based on that, the coolant temperature influence of conversion efficiency was researched on the modified model, some rules and tends between the coolant temperature and the heat transfer in the cylinder were obtained. Results indicated that the power conversion efficiency would increase by 2%~3% with coolant temperature raised by 20℃ on 30% load of diesel engine.