The use of Phase Change Materials (PCMs) in asphalt pavement mixtures potentially offers a solution for regulating extreme temperatures that can cause thermally-induced rutting in pavement systems. The primary objective of this study is to fundamentally understand the effect on the heat transfer and maximum surface temperature in flexible pavement systems that includes PCMs. In particular, we consider a pavement structure in which PCM is embedded in the asphalt-concrete layer with varying volume fractions. Our simulation results show that the pavement system embedded with PCMs yield lower surface temperature values than systems without PCM (maximum temperature decrease is 1:5°C for the distributed PCM with a volume fraction of 30%). Further, we observe a higher temperature drop through the PCMembedded asphalt layer compared to a pavement without PCM, and regions possessing temperature values less than 45°C that may help to reduce the thermally induced rutting problems. The simulation yields another interesting result: increasing PCM volume fraction beyond 60% results in higher surface temperature values. This increase in the maximum surface temperature may be explained by the fact that the PCM used in the simulation has a lower thermal conductivity than that of the asphaltconcrete that ultimately results in a lower effective thermal conductivity value for the system. Finally, we observe that an increase in the effective thermal conductivity yields lower surface temperature for the PCM embedded pavement system.