Wood Lake is part of a chain of five major lakes within the Okanagan Valley in the interior of British Columbia. The lakes of the Okanagan Valley were formed by about 8900 years ago. Wood Lake is immediately south of Kalamalka Lake and in 1908 was connected to it by a dredged channel. The lake is named after Tom Wood, who settled on the south end of the lake around 1860.

The dry climate and suitable soil supports a substantial tree fruit industry around the lake and throughout the valley. The upper watershed is well forested and has been logged for several decades. The lower elevation of the watershed is described as a Ponderosa pine/bunchgrass area.  The lake surface freezes in winter.