During gravity wave breaking, heating rates are determined by wave advection, turbulent diffusion, and turbulence dissipative heating. A series of numerical experiments show that the total heating rates can be large (~¿10 Kh-1) and can cause large local temperature changes. The wave advection causes dynamical cooling in most of the wave breaking region, consistent with previous studies. Nonuniform vertical turbulent diffusion causes strong transient heating in the lower part of the wave breaking region and cooling above. The dissipative heating rate is relatively small compared with those due to the dynamical cooling and turbulent diffusion. In these numerical experiments, zonal wind and temperature perturbations of the diurnal tide and the zonal mean zonal wind and temperature compose the background state for the computation. This is used to examine the idea that temperature inversions, often observed in the mesosphere, are related to the gravity wave and tidal wave interactions. The simulation results show that the large temperature changes in this process can form temperature inversion layers that progress downward with a speed similar to that of a diurnal tide phase speed, which clearly suggests the tidal modulation of the gravity wave and mean flow interactions. Such a process is dependent on season and latitude, because the background state stability varies with season and latitude. The development of the temperature inversion is also affected by the gravity wave characteristics. It is also shown that the local mean wind, wind shear, and chemical species can undergo large changes accompanying the temperature inversion. ¿ 2000 American Geophysical Union