A simple conceptual model has been recently developed for analyzing pressure and temperature data from flowing fluid temperature logging (FFTL) in unsaturated fractured rock. Using this conceptual model, we developed an analytical solution for FFTL pressure response, and a semianalytical solution for FFTL temperature response. We also proposed a method for estimating fracture permeability from FFTL temperature data. The conceptual model was based on some simplifying assumptions, particularly that a single-phase airflow model was used. In this paper, we develop a more comprehensive numerical model of multiphase flow and heat transfer associated with FFTL. Using this numerical model, we perform a number of forward simulations to determine the parameters that have the strongest influence on the pressure and temperature response from FFTL. We then use the iTOUGH2 optimization code to estimate these most sensitive parameters through inverse modeling and to quantify the uncertainties associated with these estimated parameters. We conclude that FFTL can be utilized to determine permeability, porosity, and thermal conductivity of the fracture rock. Two other parameters, which are not properties of the fractured rock, have strong influence on FFTL response. These are pressure and temperature in the borehole that were at equilibrium with the fractured rock formation at the beginning of FFTL. We illustrate how these parameters can also be estimated from FFTL data.