The strong laser action of $CO_2$ occurs in glow discharge of $CO_2-N_2$-He gas mixtures. The laser action is on a number of rotational transitions belonging to the $\Sigma^+_u,\,\Sigma^+_g$ vibrational band of $CO_2$ in the region of 9.4$\mu$ and 10.6$\mu$. We have investigated the physical processes in the $CO_2$ laser system and compared the theoretical results with the performance data of home-made $CO_2$ laser. The depdendence of the small signal gain and the saturation intensity, which are important for calculating the output power of $CO_2$ laser, are calculated following the thermodynamic approach. The basic assumption of the thermodynamic approach is that the molecular vibrations are simple harmonic oscillations and each vibrational mode can be characterized by a kinetic temperature. The various energy transfer processes were integrated to obtain a selfconsistent energy transfer equations. In doing so, energy transfer rates were tabulated and the energy conservation principle was applied. The molecular vibrational temperatures are computed numerically from the energy equations using the steady state condition. Our calculation assumes the total gas pressure at 8 torrs and the mixture ratio of $CO_2$: $N_2$: He=1:1:8 which is near the optimum condition for the maximum power output. The $CO_2$ laser constructed for this experiment uses a conventional water-cooled cylindrical discharge tube, which is placed in a two-mirror optical resonator. The diameter of the curved tube is 2cm and the discharge length is 80cm. Using an optical power meter, the output laser power is measured at different discharge currents and gas pressures.