On my 1998 V70, its a temperature sensor mounted under the front of the car on I believe, the right side of the air guide. I'm guessing its in the same location on your car. Obviously do some research to be sure. I remember changing the coolant and I removed the air guide and disconnected the connector from the sensor. I forgot to reconnect it and got a CE light when I started up the car.

It works with the ECM to determine the best fuel/air mixture and other engine functions based on the outside air temperature. It also sends a signal to your outside thermometer in the car. I'm I'm wrong, somebody please correct me.

I'd say try clearing the check engine light first. If it comes back on, check the electrical connector when you acually locate the sensor. Disconnect it, clean the inside of the connector and plug it back into the sensor If it still comes back on, I'd change the sensor.

Tasca Volvo in Seekonk MA. has excellent prices on mail order parts.