The lake is 75 kilometres (47 mi) south of Munich in the middle of the Bavarian Alps. The entire lake, including the island Sassau is part of the municipality of Kochel. To the east and the south, the lake borders the municipality of Jachenau.
Walchensee fills a tectonic valley; part of the Bayerischen Synkline or Bavarian syncline and from rocks of the triassic period (the main dolomite, Plattenkalke, and Kössener layers). The extreme depth of the lake, 192.3 metres (631 ft) is the result of this tectonic formation. The rock faces of the northwestern shore cleary shows the steep arrangement of the rock layers. The creation of the lake from the forces of mountain building indicate that Walchensee could be one of the oldest lakes in Germany. During the ice age, the Isar-Loisach glacier repeatedly left its mark on the morphology of the area and thereby the Walchensee.