Karaha - Telaga Bodas geothermal system consists of: 1) a caprock, ranging from several hundred meters to 1600 m thick that is characterized by steep, conductive temperature gradients and low permeabilities; 2) an underlying vapor-dominated zone that extends below sea level; and 3) a deep liquid-dominated zone with measured temperatures up to 353??C. Heat is provided by a 3 km deep tabular granodiorite stock. The effective base of the reservoir is controlled by the stress regime's effect on fractures within volcanic rocks located above the brittle/ductile deformation boundary. The base of the caprock is controlled by the distribution of initially low-permeability lithologies above the reservoir; the extent of pervasive clay alteration that has reduced initial permeabilities; the distribution of secondary minerals deposited by descending waters; and by a downward change from a strike-slip to an extensional stress regime. Producing zones are controlled by both matrix and fracture permeabilities.