Lake Tuggeranong was created by the construction of a dam in 1987 coinciding with urban development in the district. The lake was built as a sediment trap for soil and debris, and to improve the quality of the water flowing into the Murrumbidgee River. Tuggeranong Creek feeds the Isabella Pond, that then flows into Lake Tuggeranong. The water quality of the lake is monitored by health and environmental agencies, and is subject to health hazards such as toxic blue-greenalgal blooms or high faecalbacteria counts, given the urban and rural runoff of the lake source.
The lake is a popular recreational site. The foreshore of the lake is parkland, with swimming, fishing, wind-surfing and non-motorised boating all possible activities on the lake. A bicycle path surrounds the lake, running for 6.7 kilometres (4.2 mi).