Clouds Creek rises in the Ellis State Forest, about 8.8 kilometres (5.5 mi) west southwest of Sheas Nob, within the Great Dividing Range, south southwest of Grafton. The river flows generally to the east then north before reaching its confluence with the Nymboida River at Benabar, a locality on the Armidale Road, 8 kilometres (5.0 mi) south of Nymboida.[1] The river descends 56 metres (184 ft) over its 42 kilometres (26 mi) course,[3] including descending over Clouds Creek Falls about 2,400 metres (7,900 ft) northwest of Kurrajong Spur.[2]