Small-scale gravity waves (GWs) cannot be resolved by contemporary general circulation models (GCMs) and it is thus necessary to parameterize their propagation and the resulting effects in order to realistically simulate the atmosphere. It is well established that GWs play an essential role for the momentum budget of the middle atmosphere. However, historically, their propagation into the thermosphere above the turbopause and the resulting effects had not yet been studied either due primarily to the lack of an appropriate GW schemes for the whole atmosphere system or the middle atmosphere GCMs did not extend into the thermosphere. Recently, we have developed an extended nonlinear spectral GW parameterization that physically accounts for the penetration of GWs of lower atmospheric origin into the upper atmosphere, and quantifies the resulting dynamical and thermal effects associated the attenuation of GWs [1]. In addition to nonlinear wave-wave interactions and self-interactions, dissipation of GWs due to additional middle atmospheric and thermospheric physics, such as ion drag, molecular viscosity and conduction, eddy viscosity and radiative damping are accounted for. Simulations with a GCM extending from the lower atmosphere to the upper atmosphere [2-4] suggest that GWs penetrate significantly into the upper atmosphere up to F2 layer altitudes, and the associated momentum and energy deposition rates are comparable to thermospheric ion drag and Joule heating, respectively. Thus, these results demonstrate the importance of properly parameterizing the effects of small-scale GWs of lower atmospheric origin for better understanding the morphology of the upper atmosphere. Also, properly accounting for GW dissipation above the turbopause is shown to improve GCM simulations with respect to two widely used empirical models of the upper atmosphere. References: [1] Yiğit, E., A. D. Aylward, A.S. Medvedev (2008), J. Geophys. Res., 113, D19106, doi:10.1029/2008JD010135. [2] Yiğit, E., and A. S. Medvedev (2010), J. Geophys. Res., 115, A00G02, doi:10.1029/2009JA015106. [3] Yiğit, E., and A. S. Medvedev (2009), Geophys. Res. Lett., 36, L14807, doi:10.1029/2009GL038507. [4] Yiğit, E., A. S. Medvedev, A. D. Aylward, P. Hartogh, and M. J. Harris (2009), J. Geophys. Res., 114, D07101, doi:10.1029/2008JD011132.