The lake is named after the provincial capital city of Urmia, originally a Syriac name meaning city of water. Its ancient Persian name was Chichast (meaning, "glittering"--a reference to its glittering mineral particles suspended in the lake water and its shores). In the medieval times it came to be known as Lake Kabuda, or "azure," in Persian, (Gabod in Armenian).

The lake is marked by more than a hundred small rocky islands, which are stopover points in the migrations of various kinds of wild bird life (including flamingos, pelicans, spoonbills, ibises, storks, shelducks, avocets, stilts, and gulls). The second largest island, Kaboudi, is the burial place of Hulagu Khan, the grandson of Genghis Khan and the sacker of Baghdad.

By virtue of its high levels of salinity, the lake does not sustain any fish species. Nonetheless, Lake Urmia is considered to be one of the largest natural habitats of Artemia, which serve as food source for the migratory birds such flamingos. Most of the area of the lake is considered a national park.