It preserves a sequence of vegetation types from mature rimu forest through mānuka scrub to brackish water that has been lost in much of the rest of the West Coast.

The lagoon's name is from the Māori Ō, place of, and kārito, the young shoots of the bulrush or raupō (Typha orientalis), a valued food source.

The lagoon is tidal, with large stretches of mudflat being exposed at low tide, when reliable passage for canoes is only possible along a main channel.

In an earthquake, the estuary floor settles and deepens, but sediment from landslides is also washed down from the mountains, forming a spit which partly blocks the lagoon off from the sea and raises the shoreline.

[4] Ōkārito Lagoon has extensive meadows of eelgrass (Zostera muelleri), one of the few such estuaries remaining in New Zealand; most have been wiped out by pollution and sedimentation after forest clearance.

Eelgrass beds are highly productive, not only drawing nutrients up out of the mud but providing a rich habitat for invertebrates and a nursery for baby fishes.

[4] On the inland side of the lagoon are large stretches of saltmarsh and swampland, dominated by jointed wire rush or oioi (Apodasmia similis).

This becomes a band of mānuka (Leptospermum scoparium), mingimingi (Coprosma propinqua), and flax (Phormium tenax) shrubland that transitions through kahikatea swamp forest into bush dominated by rimu and silver pine (Manoao colensoi).

Ōkārito is one of the few places on the West Coast where the transition of tall rain forest through scrub and rush to brackish water can still be easily observed.

[4] The transition zone can stretch quite a distance and contain saltmarsh ribbonwood (Plagianthus divaricatus), cabbage trees (Cordyline australis), and invasive gorse (Ulex europaeus), gradually incorporating kahihatea, southern rātā, and kōwhai (Sophora microphylla) as salinity declines; or it can take place over just a few metres on the bank of a creek.

[6] There is only one breeding site for White Heron in New Zealand: within the protected Waitangiroto Nature Reserve, north of Ōkārito Lagoon.

Ōkārito was an important mahinga kai (food-gathering site) for Kāti Māhaki ki Makaawhio, a subtribe of Ngāi Tahu, who were collecting and working pounamu for trade.

[5] The lagoon has been made a mātaiti reserve with the support of local Makaawhio Māori, which allows for customary and recreational food gathering but not commercial harvesting.

[5] The area between Ōkārito Lagoon and the mountains is targeted by the $45 million Predator Free South Westland project, which aims to remove rats, stoats, and possums from 100,000 hectares.