Lake Carlsbad is formed by the Lower Transill Dam on the Pecos River.

The Lake Carlsbad Recreation Area is 125.6 acres located along the Pecos River from the railroad bridge south to the upper Tansil Dam. This area is used for picnics, water sports, playgrounds, fishing, and boating. There are many areas for picnics in shaded areas with picnic tables and grills. There is a swim area that is open to the public from Memorial Day weekend through Labor Day weekend.