In order to decrease air pollution and save conventional energy, geothermal energy as a heat source for district heating systems has been used widely in China due to its cleanness and lower operating cost. This paper describes the geothermal resource and district heating system in Tianjin. Heat load for one sample building was calculated using Icelandic heat loss calculations and the Chinese building code. Based on this, both geothermal heating and a fuel-fired system using a steady-state model and a dynamic model were simulated and the results analysed. A sample district heating system network was set up, pressure and temperature drop of pipeline were calculated, and the system simulated. A dynamic simulation model is a powerful tool for a designer to study the system performance and optimise the heating system.