This paper surveys the geothermal potential in Poland, the Czech Republic, Slovakia, and Hungary. It is shown that a significant part of the domestic healing needs of these countries could be met by geothermal resources, which would reduce air pollution in Central Europe. The author discusses the obstacles to the development of geothermal resources, such as unrealistically low energy prices and weak financial and institutional infrastructure, and puts them in the context of the transition of the countries in Central and Eastern Europe from command to market economy. He emphasizes the need for market price reform, new financing mechanisms, and technology transfer to promote geothermal development in the formerly communist countries, as well as the importance of well-prepared pilot projects.