Created by the Round Butte Dam in 1964, Lake Billy Chinook lies in a canyon at the confluence of the Crooked, Deschutes, and Metolius rivers near Culver and Madras.

The Deschutes Formation into which it is carved began forming about 11 million years ago, as alternating layers of basaltic lava, stream sediment, and volcanic debris flowed into the area from the Cascade Range.

[4] One to three million years ago, lava flows from the Cascades and Newberry Volcano capped the exposed material, forming the "rimrock basalt" which is visible atop the canyon.

There are four boat launches around the lake, as well a marina and café on the east shore named the Cove Palisades Resort, which also offers rentals of houseboats and various other watercraft.

Between the Deschutes and Crooked River branches of the lake, there is a large and isolated 208-acre (84 ha), 1.75-mile (2.82 km) peninsular plateau named the Island.

The BLM plans to let any fire naturally burn as part of their research, contingent on weather conditions and personnel that can prevent it from affecting the Cove Palisades State Park facilities below the Island.