[3][4] The lake and the dam are located at an elevation of 1,375 meters (4,511 ft) in Bhimtal town in the Nainital district in Uttarakhand.

[1] According to geologists the origin of the lake is attributed to a number of faults which occurred due to shifting of the Earth's crust.

A small sanitarium on the northern shore of the lake at 1,525 meters (5,003 ft) elevation is said to be free from malaria and hence healthy.

[10] The town and the lake are named after Bhima, one of the Pandavas of the epic story of Mahabharata who is said to have visited the place.

[4][10] On the banks of the dam there is an old temple which was built by Raja Baj Bahadur Chand of Kumaon Kingdom during the 17th century.

[10][8] The C-shaped lake,[3] which is the largest in the Kumaon region,[9] impounded by the masonry dam has an area of 47.8 hectares (118 acres).

The surface inflow into the reservoir is only 1.756×10^6 m3 (62.0×10^6 cu ft) and the balance storage is contributed by subsurface sources.

The stored water is released through an outlet leading to the Gola River which is utilized to supplement the flows of the Bhabar canals.

In the bed of the lake there are deposits of injurious matter and as a result fish mortality rate is high and the quality of drinking water has also suffered.

[3] The picturesque island at the middle of the lake has recreation facilities including an aquarium and is approached by rowing boats.

[10] The dam is designed to pass a flood discharge of 45 m3/s (1,600 cu ft/s) through a chute spillway which is fitted with 12 gates.