The thermal conductivity of the fuel in today's light water reactors, uranium dioxide (UO2), can be improved by incorporating a uniformly distributed heat-conducting network of a higher-conductivity material: silicon carbide (SiC). The higher thermal conductivity of SiC along with its other prominent reactor-grade properties makes it a potential material to address some of the related issues when used in UO2 (97% theoretical density). This ongoing research, in collaboration with the University of Florida, aims to investigate the feasibility and development of a formal methodology for producing the resultant composite oxide fuel. Calculations of the effective thermal conductivity (ETC) of the new fuel as a function of percent SiC for certain percentages and as a function of temperature are presented as a preliminary approach. The ETCs are obtained at different temperatures from 600 to 1600 K. The corresponding polynomial equations for the temperature-dependent thermal conductivities are given based on the simulation results. The heat transfer mechanism in this fuel is explained using a finite volume approach and validated against existing empirical models. FLUENT 6.1.22 was used for the thermal conductivity calculations and to estimate the reduction in centerline temperatures achievable within such a fuel rod. Later, the computer codes COMBINE-PC and VENTURE-PC were employed to estimate the fuel enrichment required to maintain the same burnup levels corresponding to a volume percent addition of SiC.