The Cañas Dulces caldera is home to the Rincón de la Vieja–Santa María active volcanic complex and forms part of the northwestern sector of the inner magmatic arc of Costa Rica, together with other calderas and the active volcanoes of Miravalles, Tenorio, and Orosí-Cacao. This caldera is the site of one of the main geothermal reservoirs in Costa Rica, on which it is planned to build two geothermal plants, each with a capacity of 55 MW. Nevertheless, the characteristics of the Cañas Dulces caldera are not well known due to the fact that most of its morphological and structural traits are masked by the products emitted recently by the Rincón de la Vieja–Santa María volcanoes. Based on a revision of extensive deep boreholes and geophysical data obtained by the Instituto Costarricense de Electricidad (ICE) since 1970, combined with new geological work and radiometric dating, we describe in the present study the stratigraphy, structure, and volcanic evolution of this collapse caldera and define a comprehensive model to describe its evolution. The Cañas Dulces caldera resulted from the massive eruption at 1.43 ± 0.09 Ma of ∼200 km3 of rhyolitic magma that was largely responsible for the formation of the Liberia ignimbrite. The caldera was formed under strong structural control dominated by two parallel NE-SW regional faults and was followed by the construction of the Rincón de la Vieja–Santa María volcanic complex on one of the caldera’s structural borders. The formation of this caldera and of a new shallow magmatic system facilitated the installation of the highly productive geothermal system inside the caldera.