Geophysical surveys are efficient ways to obtain information on areas that are promising for geothermal energy. One of the geophysical techniques commonly used is the magnetic method, which is useful to detect shallow structures and changes in magnetization due to processes related to geothermal activity, such as faulting and hydrothermal alterations. Despite the richness of available geothermal resources in South America and Ecuador, the use of these resources for electricity production is very limited. Chachimbiro, in northern Ecuador, is one of the potential sites for developing a geothermal power plant. Our objective is to provide complementary magnetometry data to improve the existing model of the geothermal area. We performed high resolution ground magnetometry survey of ~30 m spacing around the prospective drilling area in order to better understand the shallow structures above the reservoir. We also performed two additional survey lines with ~5 m spacing across possible fault locations. After necessary data reductions the magnetic anomaly map was compared with a digital elevation model and a geological map of the area. This helped to understand the distribution of the anomalies and their relation with the presence of high magnetic susceptibility materials, hydrothermal alterations and topography. Major anomalies observed in the magnetic profiles were compared with forward fault models, allowing us to distinguish topographic from fault effects. We then compared our new magnetometry results with previous geophysical models of the Chachimbiro geothermal system. The large long-wavelength negative anomaly on the Northeast side of the survey area seems to coincide with the suggested location of the clay cap, and can therefore be used to improve the existing models. The new magnetic exploration of Chachimbiro therefore shows the usefulness of this method to locate magnetic anomalies related to faulting and hydrothermal alterations.