The Lake Memphremagog watershed drainage area encompasses a total of about 687 square miles of which 489 square miles (71%) are located in Vermont and 198 square miles (29%) are in the Province of Quebec. Although the majority of the lake's watershed is found within Vermont, about three-quarters of the lake's 38 square mile surface area is located in Quebec.


There are three main rivers in the Vermont portion of the lake's drainage basin - the Black, Barton and Clyde Rivers, which flow northerly and empty into the southern end of Lake Memphremagog, also known as South Bay. These three rivers drain close to 65% of the lake's entire watershed area. A smaller river, the Johns River begins in the Town of Derby, Vermont, flows northwesterly into Quebec for a short distance and then back into Vermont and Lake Memphremagog.

The Vermont portion of this basin is rich in lakes and ponds, encompassing Great and Little Hosmer Lakes, Lake Parker, Crystal Lake, Lake Willoughby, Island Pond and Seymour Lake, and many others. Also in Vermont, and considered part of this drainage basin, are two other international river watersheds: the Coaticook River and the Tomifobia River. These two rivers, which do not actually empty into Lake Memphremagog, flow north and drain into the St. Francis River. Great and Little Averill Ponds, Norton Pond, and Holland Pond are four waterbodies in Vermont found within these two international river watersheds.

The Vermont Department of Environmental Conservation (DEC) began a watershed initiative in the Lake Memphremagog drainage basin in the fall of 2006. Two DEC Watershed Coordinators are working as a team within the Vermont portion of the basin, initiating a comprehensive planning process that will identify and prioritize state and local water quality issues and implement on-the-ground watershed protection and restoration projects. The Watershed Coordinators will collaborate with state, federal and municipal organizations, local conservation groups, businesses, and a variety of landowners and interested citizens to develop the Lake Memphremagog Watershed Plan. The purpose of the plan is to protect the values of high quality water resources and restore the waters which do not meet the Vermont Water Quality Standards.