The park is situated in the valley of the Chuluut River and Suman River in the Tarvagatai Range of the Khangai Mountains. Lake Terkhiin Tsagaain is a freshwater, oligotrophic lake in a volcanically-formed valley. The terrain immediately around the lake is hills with steppe and forest steppe vegetation. The lake is about 15 km long. It has a maximum depth of 20 meters, with 40% being less than 2 meters deep.[2]
Khorgo Mountain is about 4 km east of the lake, in the Taryatu-Chulutu valley, a volcanic field. Khorgo experienced a significant eruption in approximately 8,000 BCE.
The fish in the lake are typical northern Eurasian species - cyprinids (Cyprinidae), pike and perch. Birds breeding in the marshes along the lake's edge include Bar-headed goose (Anser indicus), Ruddy shelduck (Tadorna ferruginea), and Red-breasted merganser (Mergus serrator).[2]