The lake is located in Kisoro District in the southwestern Uganda 20 kilometres north of Kisoro town where the district headquarters are located. This location is 454 kilometres by road, southwest of Kampala. It is found in the foothills of the Virunga Mountain Range, at an altitude of 1,800 metres. The three volcanoes within the range which are located in Uganda, namely: Mount Muhabura, Mount Sabinyo and Mount Gahinga, can be viewed from Lake Mutanda. There are several islands in the lake. The lake is drained by the Rutshuru River, which flows northward to Lake Edward. The environment on the islands within the lake and the surrounding countryside includes lakeside forests and wetland habitats that provide a haven for the endangered mountain gorilla.
In addition to the mountain gorilla and golden monkey in the nearby Mgahinga Gorilla National Park, the lakeside environment accommodates a variety of animal and plant species which unique to this area. Bird species include kingfisher birds, kites, ibis and Uganda’s national bird, the crested crane. Weaver bird nests are a common site among the reeds along the lake shore. In addition to the abundant and varied avian species, the lake shore also supports several species of snake, chameleon, monitor lizard and frog species. There is a varied and abundant supply of insect life as well. The unique mammals to Lake Mutanda include the African clawless otter. Hippopotamus was endemic to the area, but were last sighted at Lake Mutanda in 1994.
There is also Mutanda Island located at an altitude of 1.790 meters which is the biggest of all the islands found on Lake Mutanda. The Lake is one of the volcanic lakes in the area, designated as fresh water lakes due to springs and streams in the area.