The study area encompasses the San Miguel and Agua Blanca fault zones and adjacent areas, northwestern Baja California. The basement rocks of the area are a series of prebatholithic metasedimentary and metavolcanic rocks, and intrusive batholitic rocks, with lesser amounts of postbatholithic sedimentary and volcanic rock. Fourteen hot spring and well localities are known to exist within this area, of which eleven are investigated in this study. Thermal phenomena are in general related to faults, indicating that fault zones act as major conduits for thermal water flow. Inland thermal waters have less than 700 ppm total dissolved solids, whereas coastal thermal waters have higher total dissolved solid content due to sea water mixing. Dissolved constituents in the thermal waters are derived from hot-water/rock interaction. Variations in relative amounts of chloride, hydrogen sulfide, and total alkalinity define four types of thermal waters based on surface character. High chlorinates are a result of sea water mixing. Variations in hydrogen sulfide content are due to dissolution of calcium carbonate, which is facilitated by addition of carbon dioxide to the system. Possible sources of carbon dioxide are decomposition of organic matter in aerated ground waters and metamorphic conversion of calcite and wollastonite at depth. Water chemistries indicate that inland hot spring waters are of meteoric origin, and coastal hot spring and well waters have a sea water component. High variations in atomic Cl/B and Cl/Cs ratios in hot spring waters indicate there is no rapid communication of thermal waters throughout the system. Depletion of hot spring waters in Mg relative to creek waters suggests hydrothermal deposition of Mg-bearing minerals. Estimated maximum reservoir temperatures using the Na-K-Ca and silica geothermometers range from 118°C at Valle Trinidad to 181°C at Bahia Papalote, being highest at the coast and lower inland. An inverse relationship between both estimated maximum reservoir temperature and heat flow to hot spring elevation indicates that main heat source is subcrustal. Reservoir temperatures in the vicinity of Punta Banda and Valle Santo Tomas are enhanced by extensional movement on the Agua Blanca fault, which dilates passageways for water flow, allowing deeper circulation. Deep water circulation as a result of extensional fault movement is also present at Valle Trinidad, but reservoir temperatures are not greatly enhanced here because of a lower geothermal gradient associated with greater crustal thickness near the center of the peninsula. The geothermal system in northwestern Baja California is a result of deep circulation of meteoric waters in an area of low to normal heat flow, and contains low temperature hot water. Valle Maneadero is the most favorable portion of the study area for exploitation of geothermal resources because of its relatively high reservoir temperature and water storage capacity.