It is the westernmost of three large stratovolcanoes that trend northwest to southeast obliquely perpendicular to the Andean chain along the Mocha-Villarrica Fault Zone,[3] and along with Quetrupillán and the Chilean portion of Lanín, are protected within Villarrica National Park.

Rainfall plus melted snow and glacier ice can cause massive lahars (mud and debris flows), such as during the eruptions of 1964 and 1971.

The alignment is attributed to the existence of an old fracture in the crust, the North West-South East trending Mocha-Villarrica Fault Zone,[3] the other volcanoes in the chain, Quetrupillán and Lanín, are far less active.

[5] Villarrica emerged during the Middle Pleistocene and grew forming a large stratocone of similar dimensions to the current edifice.

100,000 years ago during the Valdivia Interglacial the ancestral Villarrica collapsed following an eruption and formed a large elliptical caldera of 6.5 and 4.2 km in diameter.

During the Llanquihue glaciation Villarrica produced pyroclastic flow deposits, subglacial andesite lavas and dacite dykes.

It collapsed once again 13,700 years ago forming a new smaller caldera, among other pyroclastic flows the Licán Ignimbrite has been related to this event.

[9] Villarrica is popular for climbing with guided hikes to the crater from the town of Pucón, but these may be suspended due to cloud or volcanic activity.

[11] This burial would have prompted settlers to move the city westward to its modern site, a place less prone to volcanic hazards.

[11] There are uncertainties in the eruptive record in the first half of the 17th century due to the Mapuche and Huilliche uprising which led to the surrender or abandonment of Spanish settlements during the destruction of the Seven Cities.

[citation needed] On 2 March, at 2:45 am, it began a strombolian eruption, and residents of Coñaripe, a wood-logging town, fled to the surrounding hills.

The sudden inflow of lahars into Villarrica Lake caused the water level to rise, flooding some low-lying pastures.

After a brief halt in activity lava poured from a new vent on the north-east side, melting considerable amounts of water and causing lahars.

These lahars affected Pichaye, El Turbio, Collentañe, Minetué, Molco, Voipir and Curarrehue, all of them in the Trancura River basin.

The eruption exceeded the height of the volcano, causing a loud explosion that woke the neighbors, and forcing the evacuation of 3,385 people in nearby communities.