Abstract In this paper we describe a novel transient electromagnetic borehole system for reservoir monitoring that has important advantages over existing borehole electromagnetic technology. This work is based on computer simulations of waterflooded reservoir models that demonstrate the effectiveness of this technology for reservoir monitoring. Conventional and enhanced oil recovery processes such as waterflooding, steam flooding, and chemical flooding cause key changes in reservoir fluid composition over time. The proposed transient electromagnetic borehole technology can be used for fluid-front monitoring and to detect bypassed pay in reservoirs. Existing cross-well borehole electromagnetic technology has shown potential for detecting changes in the reservoir over time by measuring resistivity contrasts. However, this approach has limitations, most notably that the measurements are limited to the region between a pair of wells. We show that transient measurements have a distinct advantage over traditional continuous-wave measurements in that different segments of the transient signal can be mapped to different regions of the formation. Furthermore, the measured transient signal experiences no interference from the transmitter because the transmitter is silent when the formation signal is acquired. This technology eliminates the need for using at least two separate wells simultaneously, and it results in better spatial resolution for the region close to the well. We use a realistic model of a waterflooded reservoir as a benchmark to present several three-dimensional (3-D) transient simulation results, demonstrating that this technology can provide deep (up to 300 m) and azimuthally selective measurements. As opposed to cross-well technology, the proposed technique does not need a multifrequency, multispacing transmitter-receiver system or wireline logging equipment. It can be implemented as a permanent sensor system in the borehole. It can potentially also be used to monitor CO2 movement in carbon capture and sequestration (CCS) applications. The 3-D transient electromagnetic computer simulations performed for this work are a significant addition to the knowledgebase of the industry.