It was named for Bill Peyto, an early trail guide and trapper in the Banff area.

[1] The lake is formed in a valley of the Waputik Range, between Caldron Peak, Peyto Peak and Mount Jimmy Simpson, at an elevation of 1,860 m (6,100 ft).

[2] During the summer, significant amounts of glacial rock flour flow into the lake from a nearby glacier, and these suspended rock particles are what give the lake a bright, turquoise colour.

appear in illustrated books,[example needed] and the area around the lake is a popular sightseeing spot.

[3] The lake is best seen from Bow Summit, the highest point on the Icefields Parkway.