A prototype to a water-cooled applicator to be used in transurethral laser-induced thermotherapy of benign prostatic hyperplasia was developed. The flexible applicator was made of Teflon tubes except for the distal outer part which was made of glass, providing a transparent medium for laser radiation and enabling efficient cooling of the surrounding tissue. For heating, laser light from a Nd:YAG laser emitting at 1064 nm, which was coupled into an optical fiber with an institutionally made diffusing tip, was used. Cooling was performed by flushing water through the applicator. By using a mathematical model it was possible to connect the temperature rise of the water in the applicator to the maximum tissue temperature. Tissue light absorption was calculated using Monte Carlo simulations and the heat conduction equation was solved numerically using a finite-difference technique. Experiments on porcine liver in vitro showed that the maximum tissue temperature could be estimated with an average accuracy of 0.4 degree C by measuring the difference in outlet and inlet applicator water temperature and using the thermal model. The results presented suggest that the described method for temperature control can be used during laser prostatectomy to maximize the lesion size while preventing carbonization.