The source of the river is Laguna del Laja in the Andes, then flows westward through the Chilean Central Valley and terminates into the Bío Bío River, being an important tributary of it.

The Laja river actually forms from a drainage in the Lake Laja where the water exits at the bottom of the lake through the side of a mountain.

Below the lake and the hydropower plants and before the Laja Falls lie 70,000 hectares of irrigated land.

Opponents argued that the interbasin transfer would dry up the Laja Falls and would increase pollution in the lower Biobío River, because the Laja River diluted the pollution from the upper BíoBío River and pollutant would be more concentrated in the absence of this dilution.

Although the Supreme Court rejected a lawsuit against the transfer, it was eventually considered to be too controversial politically and was abandoned.