Liquid-cooled exhaust manifolds are widely used in turbocharged diesel engines. The large temperature gradient in the overall manifold can cause remarkable thermal stress. The objective of the project is to optimize the operation condition and modify the current design in order to prevent high thermal stress and to extend the lifespan of the manifold. To achieve the objective, the combination between computational fluid dynamics (CFD) with finite element (FE) is introduced. First, CFD analysis is conducted to obtain temperature distribution, providing conditions of the thermomechanical loading on the FE mesh. Next, FE analysis is carried out to determine the thermal stress. The interpolation of the temperature data from CFD to FE is done by binary space partitioning tree algorithm. To accurately quantify the thermal stress, nonlinear material behavior is considered. Based on stresses and strains, the fatigue life can be estimated. The CFD results are compared with that of the number of transfer units’ method and are further verified with industrial experiment data. All these comparisons indicate that the present investigation reasonably predicts the thermal stress behavior. Based on the results, recommendations are given to optimize the manifold design and operation.