Christmas Lake is a spring-fed lake covering approximately 265 acres (1.1 km2) in the western Minneapolis suburbs of Shorewood and Chanhassen. The lake is crossed by the border of Hennepin and Carver counties, with most of the area lying within the jurisdiction of the former. Christmas Lake is known for its exceptional water clarity, the best in the Minneapolis metropolitan area, with a DNR-reported clarity level of 20 feet (6.10 m). This clarity can be attributed to the fact that Christmas Lake is a spring fed lake with a sandy bottom. Although relatively small in area, Christmas Lake becomes deep (its maximum depth is 87 ft (27 m)) very quickly, forming the basin of a depression that extends all along "the Ridge" (the rim of the lake's basin). The steep nature of the shoreline means that many houses are built far above the lake with railed motorized carts to provide access to the docks at the water level.
Although Christmas Lake is located very near to the much larger and more populated Lake Minnetonka, the lake culture is much different, with fewer powerboats and jetskis, although this is slowly changing. Christmas Lake is connected to Lake Minnetonka by an underground canal which can be used to raise the water level of Lake Minnetonka during droughts.Christmas Lake falls under the jurisdiction of the city of Shorewood, Minnesota, although much informal control is maintained by the close-knit community of homeowners, under the aegis of the Christmas Lake Homeowners Association. Neighbors organize an annual Fourth of July boat parade, where boat owners turn their boats into water-borne floats, and parade from dock to dock along the shoreline.