A passive thermal management system is evaluated for high-power Li-ion packs under stressful or abusive conditions, and compared with a purely air-cooling mode under normal and abuse conditions. A compact and properly designed passive thermal management system utilizing phase change material (PCM) provides faster heat dissipation than active cooling during high pulse power discharges while preserving sufficiently uniform cell temperature to ensure the desirable cycle life for the pack. This study investigates how passive cooling with PCM contributes to preventing the propagation of thermal runaway in a single cell or adjacent cells due to a cell catastrophic failure. Its effectiveness is compared with that of active cooling by forced air flow or natural convection using the same compact module and pack configuration corresponding to the PCM matrix technology. The effects of nickel tabs and spacing between the cells were also studied.