Using the Crosta technique, principal component transformations on six and four Thematic Mapper (TM) bands are tested in the Meiduk area, Kerman Province, Iran for mapping alteration haloes and enhancing new prospecting sites. The Crosta test is performed on both unstretched and stretched bands. Eigenvector loadings for some visible and infrared bands of TM, bands 1, 3, 4, 5 and 7, show that in each case the first principal component is an indication for albedo and the third for vegetation. Features with lower importance such as iron oxides or hydroxyls are concentrated in subsequent principal components. PC4 of unstretched data transformation on bands 1, 4, 5 and 7 enhances the hydroxyl-bearing areas around the porphyry intrusives. Some enhanced areas coincide with present porphyry deposits, and some indicate new prospects suggested for further exploration investigations. PC4 of unstretched data transformation on bands 1, 3, 4 and 5 indicates that iron oxide stained areas coincide with sedimentary terrains and is not suitable for exploration. The results of principal component transformation on stretched TM bands are relatively similar to the unstretched one but the images are brighter and the distinction between lithological units is easier. Different colour composites of hydroxyl and iron oxide images enhance alteration haloes around porphyry intrusives and sedimentary terrains. New prospects and the already known porphyry copper deposits are enhanced in white colour when the F image is considered for red, H image for green and the 'H + F' image as blue in a colour composite image. No new prospect is enhanced in the iron oxide stained terrains. The Crosta technique for hydroxyl mapping is used in this study to map alteration around porphyry intrusives and proved to be suitable for porphyry copper exploration in volcanic magmatic belts of Iran.