The Cottonwood drains a roughly fan-shaped area in the northwestern corner of the Sacramento Valley. The watershed is bounded on the north by the Klamath Mountains, and on the west by the Yolla Bolly Mountains, both part of the larger Coast Ranges. The Klamath mountains rise to elevations of about , while many higher peaks of the Yolla Bollys exceed . The watershed is divided into two main vegetation zones, with the foothills consisting mostly of chaparral, blue oak woodland and annual grasses, and the mountains comprising mixed-conifer forests, especially Douglas fir and gray pine. The upper creek and its forks are steep, fast flowing mountain streams with rocky beds. The upper section of the watershed includes significant stands of timber that support a modest logging industry, as well as large tracts of federal National Forest land.