Textiles provide an ideal structure for embedding sensors for medical devices. Skin temperature measurement is one area in which a sensor textile could be particularly beneficial; pathological skin is normally very sensitive, making the comfort of anything placed on that skin paramount. Skin temperature is an important parameter to measure for a number of medical applications, including for the early detection of diabetic foot ulcer formation. To this end an electronic temperature-sensor yarn was developed by embedding a commercially available thermistor chip into the fibres of a yarn, which can be used to produce a textile or a garment. As part of this process a resin was used to encapsulate the thermistor. This protects the thermistor from mechanical and chemical stresses, and also allows the sensing yarn to be washed. Building off preliminary work, the behaviour and performance of an encapsulated thermistor has been characterised to determine the effect of encapsulation on the step response time and absolute temperature measurements. Over the temperature range of interest only a minimal effect was observed, with step response times varying between 0.01–0.35 s. A general solution is presented for the heat transfer coefficient compared to size of the micro-pod formed by the encapsulation of the thermistor. Finally, a prototype temperature-sensing sock was produced using a network of sensing yarns as a demonstrator of a system that could warn of impending ulcer formation in diabetic patients