A new quadrilateral plane stress element is developed for efficient and accurate analysis of thermal stress problems. It is convenient to use the same mesh and the same shape functions for thermal analysis and stress analysis. But, because of the inconsistency between deformation related strain field and thermal strain field, oscillatory responses and considerable errors in stresses are resulted in. To avoid undesired oscillations, strain approximation is enhanced by supplementing several assumed strain terms based on the variational principle. Thermal deformation is incorporated into the generalized mixed variational principle for displacement, strain and stress fields, and basic equations for the modified enhanced assumed strain method are derived. For the stress approximation of bilinear elements, the $5{eta}$ version of Pian and Sumihara is adopted. The numerical results for several problems show that the present element behaves well and reduces oscillatory responses. it also results in almost the same magnitude of error as compared with the quadratic element.