The lake has an outlet stream, a tributary of Yarlung Tsangpo, at its far western end and means turquoise in English due to its color.

The Yamdrok Hydropower Station was completed and dedicated in 1996 near the small village of Baidi at the lake's western end.

Like mountains, lakes are considered sacred by Tibetan people, the principle being that they are the dwelling places of protective deities and therefore invested with special spiritual powers.

It is considered sacred as one of the four "Great Wrathful Lakes" guarded by the goddess Dorje Gegkyi Tso.

The lake, its islands, and the surrounding area are closely associated with Padmasambhava, the Second Buddha, who brought Buddhism to Tibet in eighth century AD.

From April to October, fish caught from this lake are sold at markets in Lhasa, Tibet's capital.