The generalized second-grade fluids, which have been used for modeling the creep of ice and the flow of coal-water and coal-oil slurries, are among the simplest non-Newtonian fluid models that can describe shear-thinning/thickening and exhibit normal stress effects. In this article, we conduct thermodynamic analysis on a class of generalized second-grade fluids, one distinguishing feature of which is the existence of a constitutive function Φ that describes frictional heating. We work within the framework of Serrin’s original formulation of neoclassical thermodynamics, where internal energy and entropy functions, if they exist for a continuous body at all, are to be derived from the classical First Law and (quantitatively reformulated) Second Law of thermodynamics for cycles. For the class of generalized second-grade fluids in question, we show from the First Law that an internal energy density u exists, and we derive the equation of energy balance; from the Second Law, we demonstrate the existence of an entropy density s and derive the Clausius–Duhem inequality that it satisfies. We obtain explicit expressions for u, s and the frictional heating Φ, and derive thermodynamic restrictions on the material functions of temperature μ, α1, and α2 that appear in the constitutive relation for the Cauchy stress. For the special case of second-grade fluids, our expressions for u and s agree with those which Dunn and Fosdick [6] derived under the theoretical framework of the rational thermodynamics of Coleman and Noll.