[1] The lake is situated between the Burmeister and Stafford Ranges, and is a deep channel carved out by an arm of the former Arawhata Glacier in the last ice age.

[3] Because its steep catchment is entirely forested with no major watercourses—none of its small tributaries are longer than 3 km (1.9 mi)—the lake has escaped being filled in by large debris-carrying rivers.

[1] In more exposed areas with poorer soil, such as bluffs and on the lake's single island, manoao, mānuka, and yellow-silver pine (Lepidothamnus intermedius) become dominant, along with mountain toatoa and southern rātā.

[1] Along the Lake Ellery Track other species such as mountain horopito (Pseudowintera colorata), broadleaf (Griselinia littoralis), Hall's tōtara, and mataī can be seen, and there are numerous ferns on the forest floor, including Austroblechnum colensoi.

[1] Birds were formerly much more abundant: in 1940, Jackson Bay resident Dan Greaney described the forests around Lake Ellery as "reverberating with an unbroken roll of enthralling melody".