A geothermal heat pump system is a heating and/or an air conditioning system that uses the Earth's ability to store heat in the ground and water thermal masses. These systems operate based on the stability of underground temperatures: the ground a few feet below surface has a very stable temperature throughout the year, depending upon location's annual climate. A geothermal heat pump uses that available heat in the winter and puts heat back into the ground in the summer. A geothermal system differs from a conventional furnace or boiler by its ability to transfer heat versus the standard method of producing heat. As energy costs continue to rise and pollution concerns continue to be a hot topic, geothermal systems may hold a solution to both of these concerns.

Geothermal heat pumps are also known as "GeoExchange" systems (a term created by an industry association) and "ground-source heat pumps." The latter term is useful as it clearly distinguishes the technology from air-source heat pumps. Geothermal heat pumps, which can be used in almost any region, should also be distinguished from geothermal heating. Geothermal heating is used in areas where exceptionally high underground temperatures, such as those at hot springs and steam vents, are used to heat indoor spaces without the use of a heat pump.