The city is famous for its German traditions, its natural environment, and its popularity as a tourist destination. It enjoys a scenic location close to mountains, lakes, forests and national parks. It is located from the city of Puerto Montt on the shore of Llanquihue Lake, the second largest lake in Chile. The conical Osorno Volcano and the snowcapped peaks of Mt. Calbuco and Mt. Tronador are clearly visible from the lakefront. Puerto Varas is the southernmost of a string of towns on the western shore of Llanquihue Lake that includes Frutillar, Llanquihue and Puerto Octay. It spans an area of .