Its headwaters can be found in the glacial snow melt of the UNESCO protected Los Alerces National Park in Argentina.

The Futaleufú River is fed by a chain of lakes in the Los Alerces National Park in Chubut Province, Argentina.

From its source in Argentina, the river flows 35 kilometres (22 mi) to the Chilean border and enters the Palena Province, in Los Lagos (X) Region.

The first successful raft descent was in 1991, when a group led by Eric Hertz and Chris Spelius were able to complete the entire whitewater section of the river.

This legal tool has been used to halt projects elsewhere in the past, but the policy implications of a would-be impact assessment in the Futaleufú watershed remain unclear.

This predominantly rural region relies on small-scale agriculture and fisheries as its principal industries, and currently ranks among Chile's lowest in economic performance.

[8] Adventure travel and ecotourism have been steadily contributing to growth in recent years, as Chilean and international visitors are attracted to the area's rugged mountains and whitewater rivers.

However, such activities would exclude much traditional economy and tourism around the Futaleufú, possibly displacing more jobs than they create for local residents.

This raises issues of environmental justice, as many local people, including some of indigenous heritage, would be disenfranchised by changing land use and economic structure.

Some energy from hydropower companies would be used locally by residents, mining operations, and other industry, but Endesa's previous plans suggest that most electricity would be transmitted northward to Chile's metropolitan areas,[11] which commonly experience power shortages.

In the absence of hydropower and extractive development, tourist visitation is expected to continue increasing in coming years, drawn by the Futaleufú's pristine whitewater and unspoiled natural scenery.

Additionally, if tourist attractions and infrastructure are not owned and operated locally, revenue may escape the region rather than capturing benefit for the people who live there.

When Endesa retracted its plans for building three large hydroelectric dams, the company acknowledged widespread international opposition as a major reason for the decision.

[17] This internationally supported movement was influential in opposition to the proposed HidroAysén hydropower project, which was disapproved by Chile's Committee of Ministers in June 2014.