Abstract Based on experience gained from existing sequestration pilot projects and enhanced oil recovery practices, geologic storage is a technically viable means to significantly reduce anthropogenic emissions of CO2. During CO2 injection, increasing pore pressure and temperature reduction create geomechanical deformation of both the reservoir and surrounding rocks. One of the most important concerns with respect to the long term CO2 storage is that stress changes caused by injection could lead to formation fracturing or reactivation of fracture networks and fault movements which could potentially provide pathways for CO2 leakage through previously impermeable rocks. The cumulative CO2 emission from power plants located in Wabamun lake area in central Alberta, Canada reaches 30 Mt/year. Nisku geological formation located in Wabamun lake area was chosen as storage target based on storage capacity, expected ease of injectivity, leakage risks and interference with current petroleum production in the area. In order to determine whether the post-injection stress changes affect the viability of this target formation to act as an effective storage unit, the geomechanical assessment model of the formation has been developed, which couples the flow model and geomechanical model covering all layers from the basement to the surface. This work was a part of a comprehensive feasibility study of large scale CO2 storage potential in the Wabamun area, called the Wabamun Area CO2 Sequestration Project (WASP). The model used rock mechanical properties, reservoir characterization and flow properties of the Nisku provided by extensive work in other teams of the WASP project. The present modeling work focused on evaluation of a single well injecting 1 Mt/year for 50 years, followed by simulation of 50 years of shut-in. The pressure and stress variations were modeled during and after CO2 injection utilizing geomechanical software, GEOSIM, commercial code of Taurus Ltd. In order to increase the well injectivity, the case of allowing fracture initiation and propagation in Nisku was considered. The results show that injection above the fracture pressure will have the potential to increase the well injectivity (to at least 2 Mt/year) but also create the possibility of fracturing the caprock. The possible upward fracture propagation strongly depends on the caprock stress state and mechanical properties. However, the results of the simulation of vertical propagation have been obtained under the most unfavorable assumption of constant minimum stress gradient and are only preliminary. Since injected CO2’s temperature is considerably lower than the formation temperature, thermal effects were incorporated into the models. Decreasing temperature due to CO2 injection will result in stress reduction and smaller surface deformations compared to the isothermal model. Thermal effects of cold CO2 injection will also reduce the fracture (injection) pressure and enhance the horizontal fracture propagation through Nisku. CO2 injection in the Nisku zone is not likely to cause any significant surface heave and is not likely to have any environmental impact associated with surface deformations. Surface deformation data can be used in conjunction with seismic measurements to validate mechanical properties of Nisku and overlying layers. It also can help to plan for the location of the instrumentation and surface monitoring. Given the best estimates of cohesion and friction angle, the probability of reaching shear failure in Nisku or in the caprock is low. However, the likelihood of fracturing due to thermal effects is high. The importance of modeling of thermal effects in CO2 storage is the most important contribution. The results of this study are in agreement with our research on CO2 storage in Ohio River Valley.