The eastern side receives the waters of the Panguipulli Lake by the Enco River, its main contributor.

In the west it is cut into two arms by the Tralcán Mount, and on the east side lies the Mocho-Choshuenco volcano.

[7] The Riñihue lake became famous after an event known as the "Riñihuazo", which threatened to destroy several towns, villages and cities in southern Chile.

During the Great Chilean earthquake a landslide near the Tralcan Mount dammed the Riñihue Lake.

As the water levels of Riñihue rose more than 20 meters, the dam was in danger of breaking and flooding everything downstream, including the city of Valdivia.