Petroleum resources continue to dominate the energy sectors with no sign of a decline. Petroleum reserves, however, are dwindling in view of fewer new discoveries and increased production level. It is important to determine petroleum reserves accurately in order to correctly forecast energy budget in the future.The most commonly used methods to describe the fluid flow in oil reservoirs employ constant rock properties. However, these methods are not applicable to reservoirs that undergo changes in the rock properties due to variation in pore pressure. Common characteristics of fractured reservoirs are sensitivity of permeability and porosity to effective stress. The in-situ stress, in itself, can be of mechanical or thermal origin. The thermal stress can be significant in thermal enhanced oil recovery schemes such as injection of cold fluid in hot formation during water flooding or wastewater disposal, or even during hydraulic fracturing.Unfortunately, the most commonly literature review reveals that the research in this area has been focused mainly on thermal recovery of heavy oil. Few investigation, however, have been done on the onset and propagation of fractures under thermal stress or mechanical stress. Consequently, this paper is devoted to investigate fracture development and propagation in carbonate formation under thermal and mechanical stress. A series of experiments were ingeniously designed to study the effect of thermal stress on fractured carbonate formation. Laboratory experiments were conducted to determine stress-strain relationship and the time dependence taking in account fracture formations and their propagation. A computer image analyzer was used to observe the fracture/fissures distribution for various cases of thermal stress on carbonate rocks. The role of thermal and mechanical stress in determining orientation and propagation of fractures was also studied.