Despite knowledge concerning stakeholders and the economic advantages of consultation, collaboration and innovation, analysis of the sustainability implications of the geothermal industry has tended to take a high-level or systemic overview of national performance. This study seeks to begin to fill this gap in the academic and grey literature, investigating the following research question: how do projects in the Icelandic geothermal energy sector create co-benefits with stakeholders and reflect the integration of sustainable energy development (SED)? The focus of its analysis is on identifying who are the stakeholders, what are the sustainability benefits co-created with stakeholders, and when in the project lifecycle do these occur. Based on eleven semi-structured interviews with project managers in Iceland’s geothermal industry, the study identifies a broad array of stakeholders in the sector, including national and municipal governments and public sector institutions, businesses, the public, employees and landowners. The sustainability co-benefits of Iceland’s geothermal power projects are broad and cut cross all six themes of SED and multiple phases of the project lifecycle. Although the sustainability benefits are very apparent, trade-offs are reported between the pursuit of an economically efficient energy system and nature conservation. This relates to unsustainable utilization of the resources and the environmental externalities of power production and consumption. Efforts to mitigate these effects are ongoing and the further pursuit of SED is likely in Iceland given its recognition within the nation’s new energy policy and to meet ambitious greenhouse gas emissions reduction targets in the government’s climate action plan. These are issues that are prominent in other nations seeking to decarbonize energy systems through increased utilization of geothermal resources.