The lake had a diverse fauna, including cutthroat trout; they may have reached it during a possible past stage where it was overflowing.

It reached a maximum water level ("highstand") presumably during the Illinoian glaciation and subsequently fluctuated between fuller stages and a desiccated basin.

The lake briefly returned during the Younger Dryas climate interval and eventually desiccated during the Holocene, after about 8,500 years ago.

[c] Wind-driven erosion has excavated depressions in the former lakebed that are in part filled with playas (dry lake beds).

[16] The expansion of lakes during the LGM was triggered by the growth of the Laurentide Ice Sheet, which forced the jet stream southward.

[18] The highstands lasted until 18,100–17,000 years ago when water levels declined,[14] an event christened the "Big Dry" in the Lake Estancia basin.

[21] Possibly, the southward migration of the Intertropical Convergence Zone during the "Big Dry" cooled the northeastern Pacific, inducing drought despite the occurrence of a more winter-like atmospheric circulation over North America, which would be expected to increase precipitation.

[25] Another highstand took place after the "Big Dry"[20] during the late phase of the so-called Mystery Interval,[19] when Antarctica and the European Alps were already warming despite the cooling that occurred at the time of Heinrich event 1.

[27] It appears that the end of the "Big Dry" and the transition to the Mystery Interval highstand correlates to a southward movement of the thermal equator[28] and an abrupt weakening of the East Asian Monsoon.

[32] The forcing by the Laurentide Ice Sheet was important for the Mystery Interval lake level changes as well.

[14] "Lake Willard",[36] the final highstand at about 1,860 meters (6,100 feet) elevation, has been linked to the Younger Dryas[37][14] when a moister climate returned to the Southwestern United States.

[41] Water levels at other Great Basin lakes too declined with the Bølling-Allerød period[42] and concomitant abrupt global climate change.

[43] Conversely, the water level changes at Lake Estancia are opposite to lake-level fluctuations at low latitudes.

[44] Millennial-scale oscillations are documented from lake deposits,[46] which have been explained by[47] streamflow pulses lasting several decades and separated by several centuries.

[15] La Niña conditions during the Holocene reduced water inflow into the lake, which owing to high evaporation rates could not be compensated by summer precipitation.

[65] Interstate 40 crosses the northernmost parts of the lakebed of Lake Estancia, and New Mexico State Road 41 and U.S. Route 60 pass over the western and southern lakebed, respectively;[7] formerly the tracks of the New Mexico Central Railroad and the Atchison, Topeka and Santa Fe Railway also traversed the lake bed.

[66] The lowest units of the Salinas Pueblo Missions National Monument are located close to the shorelines of former Lake Estancia.

[67] Estancia Valley covers an area of 5,000 square kilometres (1,900 square miles)[13] and is flanked to the east by the Pedernal Hills,[68] to the northwest by the Sandia Mountains, to the west by the Manzano Mountains, to the south by the Juames Mesa[69] and Chupadera Mesa[37] and to the southeast by the Rattlesnake Hills.

[78] Distinct shoreline landforms in the Estancia Valley occur at various elevations, including bars, beaches,[79][80] gravel deposits, ridges,[81] scarps,[82] spits,[79] swales,[81] terraces and wave-cut cliffs.

[79] Most shoreline deposits were formed by the accumulation of material; only in a few places did the lake actively erode pre-existing terrain.

[87] Some streams formed estuaries in Lake Estancia and/or were blocked off by partial or complete beach bars.

[92] During low water level stages, sulfate-rich groundwater formed gypsum,[55] which together with silt constitutes the low-stand deposits.

[95][38] Wind-driven excavation of the dry lakebed has produced a scarp,[96] lunette dunes,[f][82] dome-shaped landforms and crescent-shaped ridges.

Rising water levels in Southwestern North America – including Lake Estancia – have been variously attributed either to increased precipitation from storm track changes induced by continental glaciation or to decreased evaporation.

[85] Based on pollen data, sagebrush grassland occurred around Lake Estancia, with pine-spruce woodland in the Manzano Mountains.

[121] Various fossils have been found in lake deposits, including algae,[5] diatoms,[71] foraminifera, gastropods,[16] ostracods[91] and pelecypods.

[16] During desiccation phases, mollusks disappeared and charophyte, the ditch grass Ruppia, and stonewort grew in the wet soils and saltwater.

[93] Drill cores in lake sediments, landforms formed on the former shoreline and outcrops have yielded evidence of the basin's history, going back to the Illinoian glaciation.

[135][79] The paleoclimatic record of Lake Estancia is the best-studied in New Mexico,[136] although different conclusions about precipitation and temperature during the ice age have been drawn from it.

[134] Older research published in 1989 indicates that during the early and middle Wisconsin glaciation, there was no freshwater lake in the Estancia Valley.