The largest of the lakes in the Okataina Caldera, Lake Tarawera was formed about 5,000 years ago when drainage to the east was blocked by lava flows. The lake's surface area is 39 km², situated 18 km to the east of Rotorua, and five km to the west of the mountain, maximum depth of the lake is 87.5m.
Lake Tarawera's inflow is Wairoa stream, a number of springs and possible subterranean flow from Lake Rotomahana. Outflow is at its northern end, into the Tarawera River which flows north east into the Bay of Plenty. In summer it is a very popular spot for fishing, water sports, swimming and for just relaxing as there are a number of steaming hot pools to be found.