The extraction and disposal of heat from lakes and rivers is a large yet scarcely exploited source of renewable energy, which can partly replace fossil fuel heating and electrical cooling systems. Its use is expected to increase in the near future, which brings attention to the impacts of discharging thermally altered water into aquatic systems. Our review indicates that thermal discharge affects physical and ecological processes, with impacts recorded at all levels of biological organization. Many in situ studies found local effects of thermal discharge (such as attraction or avoidance of mobile organisms), while impacts at the scale of the whole water body were rarely detected. In complex systems, diffuse impacts of thermal discharge are difficult to disentangle from natural variability or other anthropogenic influences. Discharge of warm water in summer is likely to be most critical, especially in the context of climate change. Under this scenario, water temperatures may reach maxima that negatively affect some species. Given the diversity and complexity of the impacts of thermal pollution on aquatic systems, careful planning and judicious management is required when using lakes and rivers for extraction and disposal of heat. We discuss the drivers that influence the severity of potential impacts of such thermal use, and the options available to avoid or mitigate these impacts (such as adapting the operating conditions).