The feasibility of extracting geothermal energy from hot dry rock in the earth's crust was investigated. The concept being investigated involves drilling a deep hole, creating an artificial geothermal reservoir at the bottom of the hole by hydraulic fracturing, and then intersecting the fracture with a second borehole. At the beginning of FY77, the downhole system was complete, but the impedance to the flow of fluid was too high to proceed confidently with the planned energy extraction demonstration. Therefore, in FY77 work focused on an intensive investigation of the characteristics of the downhole system and on the development of the necessary tools and techniques for understanding and improving it. Research results are presented under the following section headings: introduction and history; hot dry rock resource assessment and site selection; instrumentation and equipment development; drilling and fracturing; reservoir engineering; energy extraction system; environmental studies; project management and liaison; and, looking back and ahead. (JGB)