The Town of Pagosa Springs, Colorado, has installed one of the first municipally operated geothermal district heating systems in the country. This geothermal heating system provides space heating to public buildings, school facilities, residences, and commercial establishments at costs significantly lower than costs of available conventional fuels. The start-up, acceptance, and initial operation of the new system has progressed well and without major difficulty. The most significant problems to date center on final water rights adjudication and on pressure fluctuations related to the omission of flow control valves during system construction. The current start-up and operating and maintenance experience of the Pagosa Springs system will provide valuable information for other geothermal district heating projects during their design, construction, and start-up phases.