Understanding the process of fluid circulation within fractures is crucial for the utilization of geothermal energy. However, accurately predicting the evolution of heat transfer performance remains challenging due to the complex physical mechanism behind the injection-withdraw fluid balance and poor understanding of thermal transient cooling in changing the stress state of fracture and followed aperture evolution. This study used the coupled thermal-hydraulic-mechanical simulator FLAC3D-TOUGHREACT to investigate the evolution of fracture permeability in a fractured geothermal reservoir under a variety of initial stress conditions. Results show that the produced thermal stress increases the fracture permeability first, but when the heat influence disappears, the permeability starts to decrease. Fractures that are oriented sub-parallel to the minimal principal stress have a greater slip potential, dilate, and increase permeability than other fracture types. Lower differential stress allows for significantly more stress alleviation, and the shear stress is greater which promotes the development of fracture shear failure. With a constant stress ratio of 0.65, the higher mean stress case showed a greater extent of stress reduction and shear stress build-up, which allows permeability and porosity to increase. The findings revealed that the combination of thermal stress and in-situ stress state plays a critical role in determining the evolution of fracture permeability during the fracture process.