The 8.45-square-kilometre (3.26 sq mi) lake is located at an elevation of 1,335 metres (4,380 ft) above sea level.

It sits about 15 kilometres (9.3 mi) southeast of the village of Borgund and the European route E16 highway.

The lake Juklevatnet and the mountain Høgeloft are both about 12 kilometres (7.5 mi) to the northeast.

Øljusjøen has a hydroelectric dam at the north end which directs water to a power station nearby.

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