Polymethyl methacrylate (PMMA) bone cement comprises liquid methyl methacrylate monomer and PMMA beads, the former encapsulating the beads and polymerising within 10 minutes of mixing. Up to 7% volumetric shrinkage accompanies the exothermic polymerisation reaction and subsequent cooling induces residual thermal stresses when the cement is restrained around implant components. The authors have measured shrinkages, calculated residual stresses by closed form solutions and measured stresses by a range of methods. Full field optical displacement measurement has been used to derive strains and stresses in rings of cement cooling by 50oC under representative restraints and the hole drilling technique has been applied to cured PMMA cement. A strain gauged transducer developed to measure shrinkage forces in cement rings for derivation of contact stresses. The theoretical results predict stresses in the range 10-25MPa for a range of curing temperatures. These results are supported by the experimental methods and also by subsequent finite element models. The acquisition of these results required experimental characterisation of proprietary PMMA cements, particularly in terms of elastic modulus (up to 2.65GPa) and Poisson’s Ratio (0.455). It is concluded that the thermally induced stresses are sufficient to cause cracking around hip replacement femoral stems at the stem/cement interface, in the immediate post-curing phase and prior to functional loading of the implant. Cracks of this type have been reported from clinical studies and the authors have reproduced such cracks in laboratory models of hip replacements. It is proposed that the cracks are likely to propagate by the mechanism of fatigue under cyclic loading. It is concluded that thermal stresses are important in failure of hip replacements by aseptic loosening, the most common reported indicator for implant revision. There are few references in literature that address this issue directly, however the results of this work are supportive of the measurements and observations reported and provide an explanation and understanding of the initiation of failures.