Abstract: A method and apparatus for underground storage and recovery of energy is disclosed in which a first fluid having a relatively high density is pumped from the bottom of a second cavern to the bottom of a first cavern filled with a fluid having a relatively low density by means of an overground pump/turbine apparatus. The relatively low density fluid is displaced out of the first cavern to the second cavern through an overhead connection which is filled with the second fluid. The stored energy is retrieved as the high density fluid is allowed to return to the second cavern and drives the pump/turbine.