What is an "Onsen"?
An onsen is a Japanese public hot spring bath designed for relaxation. These are hot baths, usually communal, indoors or outdoors, whose water comes from volcanic springs. The term refers to the spring itself, the baths, and also the spa resort built around them.
By definition, an onsen uses geothermal hot spring water, unlike sentō (public bathhouses) which use tap water. Onsen are places for rest and relaxation that often offer accommodation and dining options in addition to bathing.
Onsen water is reputed to have therapeutic properties due to its mineral content. Some onsen have several pools, each containing water with a different mineral composition.
Inside an onsen, nudity is the norm. Swimsuits are not normally permitted. Bathers at onsen usually bring a small towel to wash themselves. This can also serve as a loincloth when they get out of the bath. Onsen are considered by some Japanese to allow for "naked socialization," where collective nudity allows people to get to know each other better while also enjoying the relaxed atmosphere of the onsen.
More Info:
fr.wikipedia.org