The lake is located at a height of 2,730 m (8,960 ft) above sea level. With deep blue waters, the lake is held sacred to the sage Prashar and he is regarded to have meditated there. Surrounded by snow-capped peaks and looking down on the fast flowing river Beas, the lake can be approached from Mandi or from Bajaura in Kullu Valley. Both routes are 49 km (30 mi). There is a round, floating island in the lake, which is a common natural phenomenon found all around the world. It is composed of plant matter in various stages of decomposition, and is held aloft by the oxygen in its plants’ roots. The floating island moves in all directions in the lake. The floating land covers 7% of the area of the lake.
It is believed that Sage Prashar meditated on the banks of this lake, hence it is named Prashar Lake. Bhima, one of the Pandava brothers, had created the lake, the story says. After the Kurukshetra / Mahabharat war, the Pandavas were returning with Lord Kamrunag. When they reached this place, Kamrunag loved the tranquil surroundings and decided to live here forever. So, Bheem (the strongest of the lot) rammed his elbow on one of the mountains and created a big dent in the land. This dent became Prashar Lake.