Surface water percolates downward through the rocks below the Earth's surface to high-temperature regions surrounding a magma reservoir, either active or recently solidified but still hot. There the water is heated, becomes less dense, and rises back to the surface along fissures and cracks.

Sometimes these features are called "dying volcanoes" because they seem to represent the last stage of volcanic activity as the magma, at depth, cools and hardens.

Erupting geysers provide spectacular displays of underground energy suddenly unleashed, but their mechanisms are not completely understood.

Large amounts of hot water are presumed to fill underground cavities. The water, upon further heating, is violently ejected when a portion of it suddenly flashes into steam. This cycle can be repeated with remarkable regularity, as for example, at Old Faithful Geyser in Yellowstone National Park, which erupts on an average of about once every 65 minutes.

Fumaroles, which emit mixtures of steam and other gases, are fed by conduits that pass through the water table before reaching the surface of the ground. Hydrogen sulphide (H₂S), one of the typical gases issuing from fumaroles, readily oxidises to sulphuric acid and native sulphur. This accounts for the intense chemical activity and brightly coloured rocks in many thermal areas.

Hot springs occur in many thermal areas where the surface of the Earth intersects the water table. The temperature and rate of discharge of hot springs depend on factors such as the rate at which water circulates through the system of underground channels, the amount of heat supplied at depth and the extent of dilution of the heated water by cool ground water near the surface.