Abstract: The natural heat convection and the water rock thermal exchange in the aquifer thermal transfer (ATT) process are studied thoroughly in this paper in order to clarify their effect upon the process. In view of the restrictions of the conventional flow and thermal transfer equations, new equations are given to describe the two actions which are simulated accordingly by construction of a three dimensional nonlinear ATT model. Then a multi well test conducted in the second confined aquifer in Shanghai provides good data for our study. Comparison of the simulated results with the observed data shows that the natural heat convection affects the ATT process obviously and therefore can not be neglected, and that the water rock thermal exchange has insignificant effect on the ATT process because of the short duration of the process.