Carbon sequestration activities are increasing in a global effort to mitigate the effects of greenhouse gas emissions on the climate. Injection of wastewater and oil-field fluids is known to induce seismic activity. This makes it important to understand how that risk relates to CO₂injection. Injection of supercritical CO₂into the Cambrian Mt. Simon sandstone in Illinois Basin induced microseismicity that was observed below the reservoir, primarily in the Precambrian crystalline basement. Geomechanical and flow properties of rock samples from the involved formations were measured in the laboratory and compared with geophysical log data and petrographic analysis. The controlling factors for induced microseismicity in the basement seem to be the hydraulic connection between the reservoir and basement rock and reactivation of pre-existing faults or fractures in the basement. Additionally, the presence of a laterally continuous low-permeability layer between reservoir and basement may have prevented downward migration of pore pressure and reactivation of critically stressed planes of weakness in the basement. Results of the geomechanical characterization of this intermediate layer indicate that it may act as an effective barrier for fluid penetration into the basement and that induced microseismicity is likely to be controlled by the pre-existing system of faults. This is because the intact material is not expected to fail under the reservoir stress conditions.