The foundations and implications of the concepts essential to the thermodynamic analysis of nonequilibrium systems are investigated. Following a review of the background developments in irreversible thermodynamics the concept of thermostatic isolation is introduced. This provides a conceptual device whereby a thermostatic state may be established for any nonequilibrium system and a means of justifying extended use of basic relations of classical thermodynamics or thermostatics.The conventional development of the form of entropy production is outlined. This in general is the sum of extrinsic entropy production and intrinsic entropy production. The former occurs as the sum of products of generalized diffusion effects and property gradients and is the result of interactions with discrete adjacent systems. The latter occurs as the sum of products of generalized affinities and generalized reaction rates and is the result of interaction between geometrically coincident overlapping systems. Between the diffusion effect and gradients of extrinsic entropy production generally occur linear relations with phenomenological coefficients subject to the Onsager reciprocal relations. The intrinsic entropy production occurs as a relaxation phenomenon developed from the first‐order relaxation between the affinity and the displacement of the reaction from equilibrium.The relation of the ultimate limits of applicability of thermodynamics to the uncertainty in establishing thermostatic state under conditions of microscopic fluctuations is discussed.