The lake is volcanic in origin, filling an enormous caldera formed in an eruption 84,000 years ago. It is renowned as one of the most beautiful lakes in the world, and Aldous Huxley famously wrote of it: "Lake Como, it seems to me, touches on the limit of permissibly picturesque, but Atitlán is Como with additional embellishments of several immense volcanoes. It really is too much of a good thing."

The lake basin supports extensive coffee growth and a variety of farm crops, most notably corn. Other significant agricultural products include onions, beans, squash, tomatoes, cucumbers, garlic, chile verde, strawberries, avocados and pitahaya fruit. The lake itself is rich in animal life which provides a significant food source for the largely indigenous population.

While Atitlan is recognized to be the deepest lake in Central America, its bottom has not been completely sounded. Estimates of its maximum depth range up to 340 meters. The lake is shaped by deep escarpments which surround it and by three volcanoes on its southern flank. Lake Atitlan is further characterized by towns and villages of the Maya people.