Laguna de Apoyo is an endorheic lake occupying the caldera of an extinct volcano.

[6] The reserve houses a tropical dry forest ecosystem, within the reserve the flora consists of over 500 species of plants and tropical dry trees, such as pochote, black rosewood, mahogany, hogplum and guacuco, as well as a large variety and amount of orchids.

The fauna consists of mammals such as variegated squirrels, opossums, anteaters, pacas, jaguarundis, howler and white-faced capuchin monkeys.

Two-hundred twenty species of butterflies have been documented in the reserve, including 25 first records for Nicaragua[7] and dozens of mollusks.

[10][11] In addition to the endemics, three cichlids (Parachromis managuense, Oreochromis aureus, and O. niloticus) are found in the lake, but these were introduced by humans.