Oaky River rises on the southern slopes of Round Mountain, the highest peak of the Snowy Range, a spur of the Great Dividing Range south southwest of Ebor, and flows generally southwest, joined by one minor tributary before reaching its confluence with the Chandler River, southwest of Jeogla.

The upper reaches of Oaky River are transversed by the Waterfall Way between Wollomombi and Ebor.

Oaky River and its tributaries are trout streams and platypus may be sighted in the waters.

At capacity, the dam covers around 42 hectares (100 acres) and holds 2,780 megalitres (98×10^6 cu ft) of water.

A hydroelectric power station is located at the dam and the flow of water is used to generate electricity.