The heat sink was cooled by two 70 mm fans at the rear of the console on original-style consoles, while a single fan mounted on the side of the consoles was used in Xbox 360 S consoles. Newer revisions, which had a smaller core, do not feature the heat pipe or copper base. The heat sink implemented to cool the Xenon CPU was composed of aluminum fins with a copper base, and a heat pipe. The CPU also contained ROM storing Microsoft private encrypted keys, used to decrypt game data. The write-through data cache did not allocate cache lines on writes. Each core had separate L1 caches, each containing a two-way set associative 32-Kbyte L1 instruction cache and a four-way set associative 32-Kbyte L1 data cache. This cache was shared amongst the three CPU cores. Xenon was equipped with an 8th way set associative 1 MB Level 2 cache on-die running at half CPU clock speed. A 21.6 GB/s front side bus, aggregated 10.8 GB/s upstream and downstream, connected Xenon with the graphics processor/ northbridge. The original chip used a 90 nm process, although a newer 65 nm process SOI revision was implemented on later models, which was in-turn superseded by a 45 nm combined CPU and GPU chip.

However, to reduce CPU die size, complexity, cost, and power demands, the processor used in-order execution in contrast to the Intel Coppermine 128-based Pentium III used in the original Xbox, which used more complex out-of-order execution. Each core of the CPU was capable of simultaneous multithreading and was clocked at 3.2 GHz. This led to an approximate 50 percent savings in required band-width and memory footprint making the CPU having a theoretical peak performance of 115.2 GFLOPS, being capable of 9.6 billion dot products per second. The VMX128 was also modified by the addition of direct 3D (D3D) compressed data format. The dot-product instruction took far less latency than discrete instructions. The SIMD vector processor (VMX128) was modified for the Xbox to include a dot-product instruction.

The CPU emphasized high floating point performance through multiple FPU and SIMD vector processors in each core. The XCPU, named Xenon at Microsoft and 'Waternoose' at IBM, is a custom triple-core 64-bit PowerPC-based design by IBM.

The Xbox 360 took a different approach to hardware compared to its predecessor.

Memory units for xbox 360