In the summer months, Cougar Reservoir is a popular place for boating, swimming and fishing. Cougar Reservoir is located outside of Blue River along Aufderheide Drive, part of the West Cascades National Scenic Byway.

Camping is restricted to developed campgrounds in the Cougar Recreation Area. There are three developed campgrounds near the reservoir, Cougar Crossing, Slide Creek, and Sunnyside. The popular Terwilliger Hot Springs is along Rider Creek just west of the reservoir.

In late summer, early fall through spring, the water levels on Cougar Reservoir are frequently drawn down to the point where boat launches are no longer available. Reservoir and river level information is available from the US Army Corps of Engineers here. Watch for obstructions near the shoreline such as submerged stumps, logs and rocks. Small craft should stay out of open waters when it is windy since dangerous waves can build up suddenly.