Volcanoes are Basalt formations, that can take the shape of a composite volcano (tall, narrow) or a shield volcano (short, flat). The middle column (1x1) of either type consists of lava, continuing down to a large pool of lava near bedrock. They are a good source of lava for geothermal generators.
Lava will randomly generate on the surface, sometimes causing forest fires.
Note: As a recent update, some volcanoes (called supervolcanoes) can spawn. These volcanoes are distinguished because of the blazes that can spawn around it. These volcanoes should be avoided and no base should be built within 750 blocks of the volcano. The volcano can explode after weeks since it was first loaded.