The thermal conductivity of high temperature gas to the wall can significantly affect the performance of a micro-rocket motor. In this article, the thermal decomposition characteristics and the energy characteristics were studied to select a suitable propellant formulation, which meets the requirements of a micro motor. The heat distribution of a micro-thruster array was calculated to study the effect of heat loss on the combustion chamber shell. The monopropellant micro-motor model was established, and the effect of heat loss on the micro-thruster performance was investigated. Results indicated that 5: 5 Lead Styphnate/Nitrocellulose was suitable as the micro-motor formulation; the highest temperature appeared at the boundary of the combustion chamber where the thermal stress and deformation were the maximum. The thermal stress and deformation of silicon material was smaller than steel and the thermal stress was the main reason for the destruction of micro-thruster stability. The heat loss had great effects on the micro-thruster performance as it decreased the thrust by 21.7% and specific impulse by 11.8%.