A watershed is the area of land that all drains to the same body of water, the watershed for Big Creek Lake is 47,665 acres or nearly 75 square miles. The uppermost part of the watershed starts near the community of Boone and extends south to Big Creek Lake. The watershed is about 24 miles north to south. The communities of Luther, Madrid and Sheldahl all lay on the edge of the watershed.
There are three streams that feed Big Creek Lake; they are Turkey Creek, Big Creek and Little Creek. The total stream miles within the watershed are estimated to be 64 miles.
Land use in the watershed is 81% cropland with mostly a corn and soybean rotation. The timbered areas are concentrated in the state park and along the streams that feed Big Creek Lake which total 2% of the watershed. Approximately two percent of the watershed is used for grazing.