Being an endorheic lake, Reed Lake has no outflow. Inflow depends mainly on spring runoff and, as such, the lake is prone to significant fluctuations in water levels. The primary inflow is Lizard Creek[5] which is located at the western end of Reed Lake. Rushlake Creek,[6] which begins at Wood Mountain Hills, is a major tributary of Lizard Creek.
Morse, located at the north-eastern corner of Reed Lake, is the only community along its shores. At the north-western end of the lake, about 7 kilometres (4.3 mi) east of Herbert, is a Richardson International grain terminal.[7] The Trans-Canada Highway runs along the entire length of the northern shore.