Two and three dimensional transient thermal analysis of a prismatic Li-ion cell has been carried out to compare internal and external cooling methods for thermal management of Lithium Ion (Li-ion) battery packs. Water and liquid electrolyte have been utilized as coolants for external and internal cooling, respectively. The effects of the methods on decreasing the temperature inside the battery and also temperature uniformity were investigated. The results showed that at the same pumping power, using internal cooling not only decreases the bulk temperature inside the battery more than external cooling, but also decreases the standard deviation of the temperature field inside the battery significantly. Finally, using internal cooling decreases the intersection angle between the velocity vector and the temperature gradient which according to field synergy principle (FSP) causes to increase the convection heat transfer.