Masaya volcano 25 km SE from Managua is one of Nicaragua's most active and usual volcanoes. In contrast to most other volcanoes in subduction zones, it has been erupting mainly fluid basaltic lava. At the time of the Spanish Conquistadors, it contained an active lava lake and it is reported that there were attempts to extract the volcano's molten "gold." Masaya is a complex consisting of a 6×11.5 km large caldera with steep, up to 300 m high walls, and a group of young cones at the NW end including Nindirí and Masaya volcano proper. There are multiple summit craters including the currently active Santiago crater, the site of the current activity.

The Masaya complex is the successor of the massive Pleistocene Las Sierras pyroclastic shield volcano which collapsed into the caldera during repeated collapse following a series of Plinian eruptions over the past 6-7000 years. Parts of the caldera are filled with a lake.

Young activity from the Masaya complex occurred from more than a dozen vents in a circular, 4-km-diameter fracture system. It built the twin volcanoes of Nindirí and Masaya, the source of historical eruptions, at the southern end of the fracture system.

A major basaltic plinian tephra was erupted from Masaya about 6500 years ago. Historical lava flows cover much of the caldera floor and have confined a lake to the far eastern end of the caldera. A lava flow from the 1670 eruption over-topped the north caldera rim.