The ability of borehole temperature data to resolve past climatic events is investigated using Backus-Gilbert inversion methods. Two experimental approaches are considered: (1) the data consist of a single borehole temperature profile, and (2) the data consist of climatically-induced temperature transients measured within a borehole during a monitoring experiment. The sensitivity of the data's resolving power to the vertical distribution of the measurements, temperature measurement errors, the inclusion of a local meteorological record, and the duration of a monitoring experiment, are investigated. The results can be used to help interpret existing surface temperature histories derived from borehole temperature data and to optimize future experiments for the detection of climatic signals. ?? 1992.