Mallacoota Inlet is a large, sheltered coastal estuary system located within Croajingolong National Park. It consists of a larger Bottom Lake connected to a smaller Top Lake by a winding channel known as The Narrows, with numerous smaller arms and creeks branching off. The inlet is fed by the Genoa and Wallagaraugh Rivers and opens to the Southern Ocean. For paddlers, the environment offers a mix of glassy, protected inlets and more open lake expanses, with waterways lined with paperbarks and eucalyptus. The area is renowned for its abundant birdlife, including black swans, sea eagles, pelicans, cormorants, and migratory waders on features like the Goodwin Sands sandbank. Australian fur seals are occasional visitors to the Bottom Lake.

Primary launch points for kayaks, canoes, and SUPs include the Main Wharf, the lakeside boat ramps, and the foreshore area. Bastion Point provides a more sheltered launch area behind a breakwater. Many holiday accommodations also offer private water access. Key paddling routes recommended for exploration include Double Creek Arm for its overhanging trees and reflections, the narrow and winding channel of The Narrows connecting the upper and lower lakes, and the remote Gypsy Point further upstream. The shallow lake arms are areas that motorboats cannot easily access, offering quieter paddling.

Paddling conditions are generally calm and flatwater, perfect for beginners, though wind can change conditions quickly on the more open lake sections, so staying near shore is advised for inexperienced paddlers. The best times for paddling are early morning and golden hour for glassy water and optimal wildlife viewing. Sun protection is essential year-round. While boat traffic exists, the vast area offers plenty of space. There are no specific paddling restrictions mentioned, but the surrounding Cape Howe area is a designated wilderness zone with access restrictions for overnight hikes. Facilities for paddlers include multiple jetties and picnic areas around the lakeshore for breaks, and local businesses in town offer kayak, SUP, and boat hire.