We address the circulation of hydrothermal seawater near an igneous dike emplaced in the oceanic crust. By using the two-phase finite difference hydrothermal code GTHM, we are able to treat the sub-critical two-phase flow that occurs just after emplacement as well as the later single-phase circulation, which occurs as the dike cools. We investigate the effects of bulk rock permeability and dike width. The simulations show that for a 2 m wide dike emplaced in country rock with uniform permeability of 10(-9) m(2), two-phase flow may occur briefly adjacent to the dike margin in a region that is less than 0.1 m across. The width of the two-phase region and the duration of two-phase flow vary inversely with permeability, but they increase as the dike width increases. During two-phase flow, the advective heat flux at the seafloor fluctuates about its mean and the temperature near the seafloor remains nearly constant. The mean heat flux increases with permeability, but is independent of dike width, The model is used in conjunction with chlorinity data from 'A' vent near 9 degrees N on the East Pacific Rise to indicate that the permeability there is similar to 10(-12) m(2). The model suggests, however, that an additional heat source is required to account for the high-temperature vent fluids at 9 degrees N that have persisted for more than 3 years. The calculations also show that heat transport near a high permeability dike (i.e., greater than or equal to 10(-9) m(2)) is consistent with the heat transport measured for the CoAxial event plumes. The calculations further suggest, however, that for a dike to generate an event plume, the zone of high permeability should be concentrated near the dike margin, (C) 2000 Elsevier Science B.V. All rights reserved.