When my 2001 dodge stratus is cold and warms up the temperature gauge goes all the up too extreme hot then eventually comes down to normal. Is this a bad thermostat?

Is coolant system full of liquid ? Have you replaced the thermostat yet ?

I'd say you have a faulty thermostat, be it new or not. If your temperature gauge goes to cold as your engine is taking you down the highway, the thermostat is not doing its job. The temperature should never come down to below normal until engine is shut off...

It is normal for the coolant to flow back and forth at varying temperatures. is it actually boiling over and losing coolant or just flowing in? Also checking it when it is warm and making sure it is at the full hot mark and again at full cold mark when it hasnt run-i.e. in the morning before its been run that day. if you are not actually losing coolant though you dont have a problem.

The blend door may be malfunctioning if the heater core gets hot enough to heat at any given time.

where did you buy your thermostat? if you bought a fail-safe style thermostat it could have been no good before you even put it in. also is your tempeture gauge coming up to operating temp?? if it isnt your thermostat may be stuck in the open position allowing the coolant to circulate freely and not actually warm up. i would also check the lines going into the heater core. if one line is hot and the other line is cold than your heater core is probably in need of a flush or replacement.

Your Thermostat is malfunctioning and needs to be replaced. It is sticking (closed) causing the elevated temperature. When it reaches that higher than normal temperature, is when it opens up. It should opening up between 180 and 195 degrees Farenheit. Yours is obviously way beyond that.
Replace it and recheck operation.
Let me know if this helped, or if you have additional information or questions. Feel free to contact me at FixYa.com!

Here's the thing. The ECU will shut down AC if the engine temperature is too hot. If the coolant temperature sensor is malfunctioning (lying to the ECU) telling it that the temperature is hotter than it actually is, the computer will turn the AC OFF.

Look for a loose connection to the temperature sender unit on the motor.
If all connections OK, you may need a new temp sender unit.

Hello, as previously suggested by my collegue it appears you have an air lock. Have you tried parking the vehicle on level ground, from cold with radiator cap off start the car and leave it idling. Make sure the fluid/coolant levels are o.k. and let the engine reach operating temp. Keep some warm water handy and watch/listen the water/coolant system (Keep a safe/sensible distance from radiator) hopefully after a while the system will bubble and boil up let it settle for a few seconds and then top up with very warm water do this until it hopefully stops belching out of radiator. Replace cap and hopefully top and bottom hoses will be warm. Oh! nearly forgot keep all heater controls on hot with blower on full..(Inside the vehicle)
Finally I'm not joshing but is the thermostat in the right way round and functioning correctly? to test drop it in some boiling water it should open almost immeadiatly.
sorry for the epic but I'm here to help and hopefully save you time and money.
Good luck and a Happy New Year to you and your family!
Paul 'W'

open thermostat or instrument voltage stabilizer.