Induced microseismicity data from a large volume fluid injection into sedimentary rock was analyzed to study the fracture system, fluid pathways, and state of stress in the lower Frio formation in east Texas. Seismicity data are from two arrays of 25 3-component geophone packages sited in two monitoring boreholes. From a total of 2,894 event triggers, a subset of 54 microearthquakes was chosen for their high quality seismograms and clear P and S arrivals. Arrival times were picked with a precision of 0.5 to 1.0 ms, and microearthquakes were located with hypocentral uncertainties estimated as less than 10–20 m. Hypocenters farthest from the injection well define a nearly horizontal tube of seismicity approximately aligned in the direction of the injection well. A simultaneous inversion of arrival times for transverse isotropic velocity structure and hypocenters yielded P-wave anisotropy of –14% and S-wave anisotropy of –2%. Thus, velocities along vertical ray paths are higher than those along horizontal paths, probably because of lithologic differences. Single-event focal mechanisms were determined for 47 events, and many of them are normal fault type. The minimum principal stress derived from the focal mechanisms is nearly horizontal and trends approximately north-south, consistent with the regional stress state. An imaging analysis of the seismograms shows the presence of strong seismic scatterers at positions that correlate with boundaries seen in the hypocenters; both features probably result from a similar set of heterogeneities. This study demonstrates the abundance of information that can be extracted from induced seismicity data and underscores the value of induced seismicity monitoring for studying the fluid and fracture systems created by fluid injections.