The Pannonian basin is an integral part of the convergence zone between the Eurasian and Nubian plates characterized by active subductions of oceanic and continental plates, and formation of backarc basins. The first part of this paper presents an overview of the evolution of the Alpine-Mediterranean region in order to understand the large scale crustal and upper mantle processes in and around the Pannonian basin, resulting a collage of terranes of Alpine and Adriatic origin. It will be followed by a summary of the history of sedimentation, volcanism and tectonic activity. As an illustration, three regional cross sections have been prepared on the base of seismic and borehole data. Reviewing current tectonic ideas and models, we come up with a speculative tectonic scenario depicting Alcapa and Tisza-Dacia as orogenic wedges detached from their mantle lithosphere in the Alpine and Adriatic/Dinaric collision zone during the Late Oligocene to Early Miocene. They suffered a dramatic thermal impact leading to crustal melting during extrusion, when these crustal flakes could have been directly superimposed on the asthenosphere in the Carpathian embayment. Since then, the large part of the Pannonian has been cooling and a new mantle lithosphere growing. Geothermal data show that the Pannonian basin with cessation of volcanic activity in the Late Miocene is still very hot and Miocene to Quaternary clastic basin fill, together with karstified Mesozoic carbonates form good geothermal reservoirs of regional extent. In addition to these gravity-driven aquifer systems, a strongly overpressured reservoir can be found below a regional pressure seal in synrift strata and fractured basement rocks. Eventually, we show maps of geothermal installations in the Pannonian basin and suggest that at the present level of knowledge and geophysical surveying it is easy to find additional resources, however proper water management is a critical issue to avoid harmful drawdown of the groundwater table.