Rotoma-Tikorangi geothermal prospect is situated about 26 km northeast of Rotorua in New Zealand. It is associated with Okataina Volcanic Centre in the Taupo Volcanic Zone. A low level airborne magnetic survey (760 m a.s.l) covering the Rotoma-Tikorangi prospect was undertaken by staff of the Geothermal Institute in 1984. Detailed analysis of the aeromagnetic data carried out as part of the present study showed that some residual total force magnetic anomalies are independent of terrain effects. Positive magnetic anomalies are probably due to young rhyolites whereas negative magnetic anomalies are due to hydrothermal alteration. A three dimensional (3-D) magnetic interpretation indicated that hydrothermally demagnetized rocks associated with Rotoma-Tikorangi geothermal prospect have variable thickness ranging between 800 and 1250 m and dip towards the north. The geothermal prospect is characterized by concealed outflow. The results of this study also suggest that the Rotoma-Tikorangi geothermal prospect extends further to the east of a resistivity boundary delineated from previous studies. Detailed modeling of the demagnetized anomalies along respective flight lines is recommended as a follow-up to this study, to determine more accurately the extent of the hydrothermally demagnetized rocks.