The Soufrière Hills Volcano on Montserrat has been in eruption since 1995. Before then, a number of hot springs and fumaroles high on the volcanic edifice attested to the presence of hydrothermal circulation systems. All of these features were buried beneath thick deposits of volcanic ash during the early years of the eruption. However, examination of low-lying sites in the vicinity of the abandoned town of Plymouth has revealed the persistence of a zone of hot (≤64 °C) groundwater discharge in a narrow valley that opens onto the northern beaches of the town. This small valley has not been significantly affected by ash deposition, with any airfall deposits having been subsequently washed downstream during periods of rain. The seepages and small springs in this zone all emit Na–Cl groundwaters, which appear from the concentrations of major ions and B and Li to be hydrothermally altered seawaters that have undergone extensive rock–water interaction at depth. Taken together with previously published volcanological observations, the persistence of this hydrothermal system throughout the sustained eruption period suggests that a robust hydrothermal circulation system exists at depths of several hundred metres in an area that closely adjoins the still-inhabited half of the island. Comparison with similar volcanogenic hydrothermal systems in the Caribbean and elsewhere suggests that there is significant potential for development of high-enthalpy geothermal energy resources in this vicinity. Using a portable well-head generating unit, a single successful borehole in this area could reasonably be expected to yield up to 5 MW of electrical power. This output significantly exceeds the current peak electricity demand on the island (c. 3.5 MW). In concept, it would be possible to exploit any excess capacity to operate an electrolysis plant to produce hydrogen for use in vehicles on the island. Establishing energy self-sufficiency would be a major step towards the economic and social regeneration of this devastated island, with the further possibility of increasing prosperity in the future through export of surplus energy to nearby non-volcanic islands.