Lake Shikotsu is located in the south-west part of Hokkaidō. It has an average depth of and a maximum depth of , making it the second deepest lake in Japan, after Lake Tazawa. It is the 8th-largest lake by surface area in Japan and the second largest of Japan's caldera lakes, surpassed only by Lake Kussharo. It is surrounded by three volcanos: Mount Eniwa to the north and Mount Fuppushi and Mount Tarumae to the south. The caldera formed in the holocene when the land between the volcanos subsided.