Thermal grease is a viscous fluid

Fluid

In physics, a fluid is a substance that continually deforms under an applied shear stress. Fluids are a subset of the phases of matter and include liquids, gases, plasmas and, to some extent, plastic solids....

 substance, originally with properties akin to grease

Fat

Fats consist of a wide group of compounds that are generally soluble in organic solvents and generally insoluble in water. Chemically, fats are triglycerides, triesters of glycerol and any of several fatty acids. Fats may be either solid or liquid at room temperature, depending on their structure...

, which increases the thermal conductivity

Thermal conductivity

In physics, thermal conductivity, k, is the property of a material's ability to conduct heat. It appears primarily in Fourier's Law for heat conduction....

 of a thermal interface by filling microscopic air-gaps present due to the imperfectly flat and smooth surfaces of the components; the compound has far greater thermal conductivity than air (but far less than metal). In electronics

Electronics

Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...

, it is often used to aid a component's thermal dissipation via a heat sink

Heat sink

A heat sink is a term for a component or assembly that transfers heat generated within a solid material to a fluid medium, such as air or a liquid. Examples of heat sinks are the heat exchangers used in refrigeration and air conditioning systems and the radiator in a car...

.
Thermal greases use one or more different thermally conductive substances:

• Ceramic
  Ceramic
  A ceramic is an inorganic, nonmetallic solid prepared by the action of heat and subsequent cooling. Ceramic materials may have a crystalline or partly crystalline structure, or may be amorphous...
  
  -based thermal grease has generally good thermal conductivity and is usually composed of a ceramic powder suspended in a liquid or gelatinous silicone compound, which may be described as 'silicone paste' or 'silicone thermal compound'.