You're here because in TEST 1 and TEST 2, the coolant temperature sensor was reading a temperature that was within specification.
There's a good chance, that once the engine warms up... the sensor could start malfunctioning, so in this test you'll start the engine and let it warm up and make sure that the coolant temperature your scan tool is reporting actually rises.
This is what you need to do:
Check and take note of the coolant temperature your scan tool is displaying.
The coolant temperature that your scan tool is showing, should be at or around ambient temperature.
Now, touch the upper radiator hose with your hand. The hose will be cool to cold (ambient temperature).
Start the engine and let it warm up.
As the engine runs, keep your eyes on the engine coolant's temperature (on you scan tool). The temperature displayed should rise.
Every now and then, recheck the temperature of the upper radiator hose... it should still be cool to the touch.
Once the coolant temperature has reached 190° F, check the temperature of the upper radiator hose by lightly touching it with your hand.
The hose should now be hot to the touch since at 190° F the thermostat opens and lets hot coolant start to flow to the radiator. OK, let's interpret your test results below:
CASE 1: The coolant temperature displayed by your scan tool rose -This tells you that the engine coolant temperature (ECT) sensor is working correctly.
Here's why: In this test step, we've used the opening of the thermostat, which occurs at 190 to 195° F as a cross reference source for the temp sensor's accuracy.
Although this test is not 100% accurate... it is a good indicator of the ECT sensor's performance.
CASE 2: The coolant temperature displayed by your scan tool jumped between one negative number to a positive number (for example -30° F to 240° F) This confirms a malfunction with the engine coolant temperature sensor. Replace the ECT sensor.
There are several “How to Test” GM 4.3L, 5.0L, 5.7L articles. You can find them all in here: GM 4.3L, 5.0L, 5.7L Index of Articles.
Here's a sample of articles:
“This planet has - or rather had - a problem, which was this: most of the people living
on it were unhappy for pretty much of the time. Many solutions were
suggested for this problem, but most of these were largely concerned
with the movement of small green pieces of paper, which was odd
because on the whole it wasn't the small green
pieces of paper that were unhappy!”
The Hitchhiker's Guide to the Galaxy