Abstract: Research and development of the technology for near space hypersonic flying vehicles have drawn more and more attention. In the article "New Problems of Aerodynamics", Zhou and Zhang showed that, for near space flying vehicles, the existing aerodynamics is inadequate and one of the new problems is how to take the local rarefied gas effect into consideration. They also analysed hypersonic boundary layer of near space flying vehicles. Based on the research, Chen and Zhao studied the local rarefied gas effect for strong shear flow, and proposed a non-dimensional parameter Zh to characterize the rarefied gas effect. They indicate that the viscosity coefficient in conventional continuum model should be modified according to the value of Zh. In this paper, in a similar way, the rarefied gas effect in heat conduction problem is investigated by Direct Simulation Monte Carlo (DSMC). A characteristic parameter Zh_T is proposed based on the analysis of the velocity distribution functions of molecules, and the correction on thermal conductivity depending on the parameter Zh_T is obtained. A hypersonic flow of argon over a two dimensional cylinder is simulated by the proposed model, and the heat flux on the surface is examined.