Terrigal Lagoon is located between Avoca and Wamberal Lagoons. The lagoon has a surface area of approximately 0.27 km2 and a catchment area of 9.5 km2.
The bed level of the lagoon varies from -0.5m to +0.5m AHD (Australian Height Datum), although there are dredge holes down to -3.0m AHD dating back to the 1960s. The outlet to the ocean through Terrigal Beach is generally closed by the beach berm, and water levels inside the lagoon are not usually influenced by ocean tides.