Permission to copy is restricted to an abstract of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous acknowledgment of where and by whom the paper is presented. Publication elsewhere is usually granted upon request provided proper credit is made. Abstract Fracturing occurs quite often in water injection wells, with sometimes unforeseen consequences on waterflood sweep efficiency. One of the causes of fracturing is often the cooling of hot formations by cold injection water. A special version of a thermal reservoir simulator for prototype applications has thus been constructed that is capable of dealing with propagating waterflood-induced hydraulic fractures. With this simulator, fracture propagation and the effect of growing fractures on the sweep efficiency are studied. Infinite fracture conductivity is assumed. The limitation to very high leak-off fractures justifies disregarding the changes in fracture volume. Fracture growth is calculated using the concept of a critical stress intensity factor. Both poro- and thermo-elastic changes in the horizontal stresses are calculated umerically and their influence on the fracture initiation/propagation is continuously taken into account. In addition, a model of fracture wall impairment because of filter-cake build-up due to poor quality injection water is included. Results are presented for both thermal and isothermal situations. It is observed in isothermal cases that the voidage replacement ratio (volume balance during injection) determines to a great extent the length to which the fracture eventually may grow. In isothermal situations with balancing pattern injection and production a stationary fracture is observed in the steady-state flow regime. The observed dependence of the stationary fracture half-length on parameters such as the initial horizontal stress and the critical stress intensity factor is in agreement with analytical expressions for single-phase flow situations. As an illustration of thermal fracturing, results pertaining to high-rate water injection in a sandstone reservoir with properties similar to North Sea conditions are discussed. To demonstrate the importance of injection/production balance more clearly, well spacings in the simulations presented were purposely taken to be smaller than in practice. Sweep efficiencies are presented for two voidage replacement ratios with the fracture growing towards a producer; in the worst situation a reduction of the efficiency by about 20% is observed.