Being a heat source or sink, aquifers have been used to store large quantities of thermal energy to match cooling and heating supply and demand on both a short-term and long-term basis. The current technical, economic, and environmental status of aquifer thermal energy storage (ATES) is promising. General information on the basic operation principles, design, and construction of ATES systems is discussed in this paper. Numerous projects in operation around the world are summarized to illustrate the present status of ATES. Hydrogeological-thermal simulation has become an integral part of predicting ATES system performance. Numerical models which are available to simulate an ATES system by modeling mass and heat transport in the aquifer have been summarized. This paper also presents an example of numerical simulation and thermohydraulic evaluation of a two-well, ATES system operating under a continuous flow regime.