From its source in the foothills of the Great Dividing Range below Red Hill, the Campaspe River rises in the Wombat State Forest northwest of Bullengarook and southwest of Macedon near Ashbourne and Firth Park, a local camping ground and historical area.

The river then flows west of the township of Woodend and continues north through the town of Kyneton.

The middle reaches of the river are dominated by Lake Eppalock, a constructed reservoir.

The Coliban River, the most significant tributary of the Campaspe, also flows into Lake Eppalock.

In the Taungurung and Ngurai-illam Wurrung language, the river is named Yerrin, with no clearly defined meaning.