Thermostat sits between the engine and the radiator. The thermostat in most cars is about 2 inches (5 cm) in diameter. Its job is to block the flow of coolant to the radiator until the engine has warmed up. When the engine is cold, no coolant flows through the engine. Once the engine reaches its operating temperature (generally about 200 degrees F, 95 degrees C), the thermostat opens. By letting the engine warm up as quickly as possible, the thermostat reduces engine wear, deposits and emissions.
If you ever have the chance to test one, a thermostat is an amazing thing to watch because what they do seems impossible. Try put one in a pot of boiling water on the stove. As it heats up, its valve opens about an inch, apparently by magic!
The secret of the thermostat lies in the small cylinder located on the engine-side of the device. This cylinder is filled with a wax that begins to melt at perhaps 180 degrees F (different thermostats open at different temperatures, but 180 F/82 C is a common temperature). A rod connected to the valve presses into this wax. When the wax melts, it expands significantly and pushes the rod out of the cylinder, opening the valve. The wax happens to expand a good bit more because it is changing from a solid to a liquid in addition to expanding from the heat.