Mainly alluvial soils form the beds of water courses The habitat surrounding at the reservoir includes marshes, the Walawe river and its tributaries, forests and grasslands.

[2] Dead trees standing in the reservoir are visual reminders of the extent of forest cover before the construction of the Udawalawe Dam.

Species recorded from the park include 94 plants,[2] 21 fish, 12 amphibians, 33 reptiles, 184 birds (33 of which are migratory), and 43 mammals.

Hopea cordifolia, Memecylon petiolatum, Erythroxylon zeylanicum, and Jasminum angustifolium are endemic floral species recorded from the park.

Golden jackal, Asian palm civet, toque macaque, tufted grey langur and Indian hare also inhabit the park.

A study conducted in 1989 found that considerable numbers of golden palm civets inhabit the forests of Udawalawe.

A variety of water birds visit the reservoir, including cormorants, the spot-billed pelican, Asian openbill, painted stork, black-headed ibis and Eurasian spoonbill.

[2] Introduced Oreochromis spp., giant gourami, catla, and rohu are important food fish species found in the reservoir.

Clearing natural forests and planting monospecies cultures such as pine and eucalyptus are causing reduced water levels in the Walawe river.

[2] Encroachment by human settlements, poaching, illegal logging, gem mining, overgrazing and chena farming are major threats to the park.

Postage stamps bearing the images of four wild animals of Udawalawe were issued on 31 October 2007 in the series "National Parks of Sri Lanka",[6] featuring water buffalo, Sri Lankan elephant, ruddy mongoose and tufted grey langur.