Possible Causes:

1. Temperature sender is bad

2. Temperature Gauge is bad

3. Temperature Gauge Needle broken/Miscalibrated

Testing the Sender:

Find the temperature sender on the engine, on a 4 Cylinder it is located by the thermostat housing, pointing straight up. On the V6 it is on the rear left of the engine, sticking out of the head. It is easily identified by it's oddly notched connector. Disconnect the harness and turn the key to "Run". The temp gauge should read "100." If it does not continue to "Testing the Gauge." If it does, ground each terminal in the connector to the frame one at a time. One of them should cause the "Temp" warning light to come on, the other should cause the gauge to read high. If it passes this test replace the temp Sender.

Testing the Gauge:

Turn the key to "Run" while watching the needle, does it flop around? Inspect the needle closely, it should travel straight through the mount. Notice in the picture below that the fuel gauge needle is dead center on its mount, while the temp gauge needle is askew. The broken mounting point is visible on the right side of the mount. If it looks like this replace or repair the needle.

 

If the needle is fine, and the gauge seems to operate correctly but in the wrong range, you may simply need to adjust the needle. For example, if you turn the key to "Run" the temp gauge always zeros at the same incorrect temperature, but rises as you would expect it to during operation. To do so simply disassembly the cluster to remove the needle. Then with the engine completely cold or the temp sender disconnected, turn the key to run and carefully re-install the needle so it points to "100."