[1] Land use in Basin 3 is composed of scattered residential development, mostly in the community of Sudden Valley, as well as rural and commercial forestry.

There are nine annual streams and approximately 25 additional small creeks and tributaries that flow into Lake Whatcom, accounting for 23 sub-watersheds in all.

The earliest known settlement was a Northwest Coast Salish village at the south end of the lake, occupied by the Saquantch tribe.

Lake Whatcom is a reservoir of drinking water for the city of Bellingham, and its level is actively managed by control gates.

[2] The city manages the outflow to control the maximum level, to store the inflow, to provide for drinking water demand, and to keep the flow in the creek adequate for the threatened Chinook salmon.

[3] As a drinking water source, Lake Whatcom Reservoir's quality is in compliance for all tested chemicals, bacteria and turbidity.

As required by the 303(d) listing, the Washington State Department of Ecology (DOE) created a computer model to find the Total Maximum Daily Load (TMDL) of phosphorus the lake can receive while maintaining adequate dissolved oxygen levels.

Aging septic systems serving development in the watershed possibly could leach phosphorus into the water body.

The city of Bellingham and Whatcom County have also restricted development activities such as land clearing, from October 1 through May 31 annually to prevent runoff from exposed soil during high precipitation months.

Major outputs of lake water are Whatcom Creek (77.5% of outflow),[2] City of Bellingham intake (11.3%), evaporation (7.9%) and hatchery (2.5%).

[9] Invasive species of particular threat to Lake Whatcom include zebra mussel, New Zealand mud snail, Asian carp, and viral hemorrhagic septicemia (VHS).

Among these are six native species: kokanee salmon (non-anadromous form of Sockeye), coastal cutthroat trout, longnose sucker, peamouth chub, sculpin and three-spined stickleback.

[10] The Department of Health has consumption advisories for smallmouth bass and yellow perch, which can be found at the DOH website Based on the 2014 Lake Whatcom Watershed Annual Build-Out Report there are currently 6,877 dwelling units in the Whatcom County watershed with appropriate assessor's residential land use codes, and improvement values of greater than 10,000 dollars.

There are 1,811 existing vacant lots with improvement values of greater than $10,000 and an estimated 8,688 total units with build-out potential.