This study deals with determination of optimum pipe diameters based on economic analysis and the performance analysis of geothermal district heating systems along with pipelines using energy and exergy analysis methods. In this regard, the Dikili geothermal district heating system (DGDHS) in Izmir, Turkey is taken as an application place, to which the methods presented here are applied with some assumptions. The system mainly consists of three cycles, namely (i) the transportation network, (ii) the Danistay region, and (iii) the Bariskent region. The thermal capacities of these regions are 21,025 and 7975 kW, respectively, while the supply (flow) and return temperature values of those are 80 and 50 degrees C, respectively. Based upon the assessment of the transportation network using the optimum diameter analysis method, minimum cost is calculated to be US$ 561856.906 year(-1) for a nominal diameter of DN 300. The exergy destructions in the overall DGDHS are quantified and illustrated using exergy flow diagram. Furthermore, both energy and exergy flow diagrams are exhibited for comparison purposes. It is observed through analysis that the exergy destructions in the system particularly take place due to the exergy of the thermal water (geothermal fluid) reinjected, the heat exchanger losses, and all pumps losses, accounting for 38.77%, 10.34%, 0.76% of the total exergy input to the DGDHS. Exergy losses are also found to be 201.12817 kW and 1.94% of the total exergy input to the DGDHS for the distribution network. For the system performance analysis and improvement, both energy and exergy efficiencies of the overall DGDHS are investigated. while they are determined to be 40.21% and 50.12%, respectively. (C) 2007 Elsevier B.V. All rights reserved.