A dynamic multilevel method for fully-coupled simulation of flow and heat transfer in heterogeneous and fractured geothermal reservoirs is presented (FG-ADM). The FG-ADM develops an advanced simulation method which maintains its efficiency when scaled up to field-scale applications, at the same time, it remains accurate in presence of complex fluid physics and heterogeneous rock properties. The embedded discrete fracture model is employed to accurately represent fractures without the necessity of unstructured complex grids. On the fine-scale system, FG-ADM introduces a multi-resolution nested dynamic grid, based on the dynamic time-dependent solution of the heat and mass transport equations. The fully-coupled implicit simulation strategy, in addition to the multilevel multiscale framework, makes FG-ADM to be stable and efficient in presence of strong flow-heat coupling terms. Furthermore, its finite-volume formulation preserves local conservation for both mass and heat fluxes. Multi-level local basis functions for pressure and temperature are introduced, in order to accurately represent the heterogeneous fractured rocks. These basis functions are constructed at the beginning of the simulation, and are reused during the entire dynamic timedependent simulation. For several heterogeneous test cases with complex fracture networks we show that, by employing only a fraction of the fine-scale grid cells, FG-ADM can accurately represent the complex flow-heat solutions in the fractured subsurface formations.