Results of geological, volcanological, hydrogeochemical, and geophysical field studies conducted in 1988 and 1989 at the Tecuamburro geothermal site, Guatemala, indicate that there is a substantial shallow heat source beneath the area of youngest volcanism. Gases from acid-sulfate springs near Laguna Ixpaco consistently yield maximum estimated subsurface temperatures of 300°C. To obtain information on subsurface temperatures and temperature gradients, stratigraphy, fracturing, hydrothermal alteration, and hydrothermal fluids, a geothermal gradient core hole (TCB-1) was drilled to 808 m low on the northern flank of the Tecuamburro Volcano complex. The hole is located 300 m south of a 300m-diameter phreatic crater. Laguna Ixpaco, dated at 2910 years. TCB-1 temperature logs do not indicate isothermal conditions at depth and the calculated thermal gradient from 500–800 m is 230°C/km. Bottom hole temperature is close to 240°C. Calculated heat flow values are around 350–400 mW/m². Fluid-inclusion and secondary-alteration studies indicate that veins and secondary minerals were formed at temperatures equal to or slightly less than present temperatures; thus, the Tecuamburro geothermal system may still be heating up. The integration of results from the TCB-1 gradient core hole with results from field studies provides strong evidence that the Tecuamburro area holds great promise for geothermal resource development.