The most important geometric parameter in the friction stir welding (FSW) tool design is the shoulder diameter, which is currently estimated by trial and error. Here, we report a combined experimental and theoretical investigation on the influence of shoulder diameter on thermal cycles, peak temperatures, power requirements, and torque during FSW of AA7075-T6. An optimum tool shoulder diameter is identified using a three-dimensional, heat transfer and materials flow model. First, the predictive capability of the model is tested by comparing the computed values of peak temperature, spindle power, and torque requirements for various shoulder diameters against the corresponding experimental data. The change in the values of these variables with shoulder diameter is correctly predicted by the model. The model is then used to identify the optimum tool shoulder diameter that facilitates maximal use of the supplied torque in overcoming interfacial sticking. The tool with optimum shoulder diameter is shown to result in acceptable yield strength (YS) and ductility.