Heat dissipation sensors are used to inexpensively and reliably measure soil matric potential in the range -2.5 MPa to -0.01 MPa. Variability of sensor thermal properties requires individual calibration when absolute matric potential is required. Several methods for simple calibration have been proposed and each has significant limitations. This work was conducted to refine matric potential sensor calibration methods, study the temperature sensitivity of the method and present an improved temperature correction. Twelve sensors were characterized and then calibrated by burying saturated sensors in uniform, saturated soil. Soil and sensors were dried by evaporation. Equilibrium was established at calibration points by covering the soil container to stop evaporation and allow water potential equilibration throughout the container. Independent calibration values were obtained from a tensiometer and a dew point psychrometer. Measured sensor values were normalized using sensor response under very dry conditions and with sensor saturated. Temperature sensitivity of matric potential measurement was characterized over the temperature range 5 °C to 50 °C. A comparison of sensor response for wet state normalization using vacuum saturated and free water saturation of ceramic shows the latter better describes actual sensor response. Additionally, use of free water saturation value allows use of simple exponential calibration function with parameters related to ceramic hydraulic properties, This equation provided improved fit compared to more complicated 3 parameter functions. Careful study of temperature sensitivity of the method shows that current models do not adequately describe error from vapor transport.