Lake Macquarie is Australia's largest coastal saltwater lake, covering an area of 110 km2. It is a saltwater lake, due to being connected to the Pacific Ocean by a narrow but short channel. The land separating it from the ocean is only a few kilometers wide along most of its length. It has an irregular shape and a large island (Pulbah Island) in the middle — there is no point on the coast from which you can see the entire expanse or its 150km foreshore. However, a good view can be obtained from lookouts in the nearby Wattagan Mountains.
Lake Macquarie was discovered in 1800 by Captain William Reid. Reid had been sent from Sydney to retrieve a load of coal from Newcastle Harbour (the Hunter River). Reid took a wrong turn and found himself in a lake rather than a river, with no coal to be seen anywhere. The name "Reid's Mistake" was kept until 1826, when it was renamed in honour of Governor Lachlan Macquarie.
There is some recreational fishing in the Lake, although fish stocks have been significantly reduced from their original values due mainly to recreational fishing activity. Since settlement lake-bed silt has increased in some areas due to sealed roads and drainage, however the quantity is far less than in nearby Lake Munmorah, and swimming is quite tolerable.
Sailing and Yacht racing is popular, boasting multiple Yacht Clubs like;
Lake Macquarie has a significant coal mining industry and smaller agriculture and manufacturing industries. Eraring power station, a 1980s-era coal-fired power station, supplies 25% of New South Wales' power. As of September 2002, Lake Macquarie had an unemployment rate of 8.7%, which is higher than the state average but lower than that of surrounding areas. Some areas have become a popular retirement destination. There is very little tourism, with the area being virtually unknown even to residents as close as Sydney.
See also: List of cities in Australia