The Ziway-Shala Lakes Basin is a structural depression within the Main Ethiopian rift that is associated with Cenozoic volcanism, faulting and sedimentation. The Aluto-Langano volcano complex contains a geothermal field within this basin that is currently being exploited for geothermal power production. Recent magnetotelluric analyzes did not reveal a heat source beneath the Aluto-Langano geothermal field but found an electrical conductor that may be the magmatic heat source near the Silti Debre Zeyet Fault Zone (SDFZ) northwest of the Aluto- Langano geothermal field. To investigate the subsurface structure of the Ziway-Shala Lakes Basin and especially the Aluto-Langano geothermal field, a ground based magnetic survey was performed. Volcano-tectonic features were identified using a differentially reduced to the pole total magnetic field anomaly and a variety of map transformations including upward continuation, first vertical derivatives and tilt derivatives, to map the regional and residual magnetic fields. To identify subsurface magnetic susceptibility sources between the SDFZ and the Aluto-Shala geothermal field, a power spectral analysis, 2D-Werner Deconvolution, and 2D forward modeling were applied. The integrated interpretation of the maps and models, indicates that magnetic maxima occurred over the SDFZ and the Wonji Fault Zone and the minima over the Aluto-Langano geothermal field. The magnetic maxima may be caused by shallow (< 5 km) igneous intrusions that are related to deeper magma movement. The magnetic minima may be caused by warm geothermal waters causing thermal alteration of the magnetic minerals under the Aluto-Langano volcanic complex. The residual and derivative magnetic anomaly maps suggest the existence of lineations that may transfer geothermal fluids suggested by the magnetotelluric models from the SDFZ to the Aluto-Langano geothermal field. The upward movement of the fluids is evident by the magnetic minimum in the Aluto-Langano geothermal field and agrees with a recent earthquake analysis. Additionally, a majority of the magnetic lineaments are oriented parallel to pre-existing Mesozoic structures related to the opening of the Ogaden Basin.