The lake is surrounded by a dense forest cover of temperate vegetation and bamboo and is an important habitat for several bird species. Birds including Baer’s Pochard duck (Aythya baeri), wintering Merganser ducks (Mergus merganser), Little Grebe (Tachybaptus ruficollis), Mallard (Anas platyrhynchos), Common Teal (Anas crecca) and Tufted Pochard (Aythya fuligula) have been sighted in Lake Khecheopalri.
The lake is protected under the provisions of the places of worship (Special Provisions) Act, 1991 and State Government notification no. 59/ Home/ 98 dated 26.10.1998. The Khecheopalri Holy Lake Welfare Committee (a local NGO) and the local community have also invested in plantations, improved conservation management of the popular Khecheopalri mela and instituted a grazing ban in the forests surrounding the lake.