This paper describes a performance evaluation of the Gonen geothermal district heating system (GGDHS) in Balikesir, Turkey, based on energy and exergy analyses. The exergy destructions in the overall GGDHS are quantified and illustrated using energy and exergy flow diagrams for a reference temperature of 6 degrees C. The results indicate that the exergy destructions in the system occur primarily as a result of losses in the pumps, heat exchangers, and pipelines, as well as losses associated with cooled geothermal waters injected back into the reservoir. These losses amount to 14.81%, 7.11%, 1.06%, and 12.96% of the total exergy input to the GGDHS, respectively. Both energy and exergy efficiencies of the overall GGDHS were investigated to analyze and improve system performance. The efficiencies were determined to be 45.91 % and 64.06%, respectively. (c) 2005 CNR. Published by Elsevier Ltd. All rights reserved.