Loch Faskally is a man-made reservoir created in 1950 when the Pitlochry hydroelectric dam was built across the River Tummel. The dam backing up the river created a loch about 3km long and of considerable beauty — a sheet of water in a wooded valley, edged by hills, with the theatre and the fish ladder dam visible at its southern end. The creation of the reservoir drowned some of the old river valley and several farm buildings; the Tummel running free through the gorge below the dam gives a sense of what was lost, and what remains.
A footpath circumnavigates the loch and makes one of the better walks in the Pitlochry area — the full circuit is about 9km and takes 2.5-3 hours at a relaxed pace. The path passes through deciduous woodland with good birdlife (red squirrels are regularly seen), skirts the shoreline, and crosses the dam. The Theatre sits directly on the loch shore and the walk gives a different perspective on the venue.
Fishing on Loch Faskally for salmon and trout requires a permit, available from local tackle shops. The resident population of wild brown trout is joined by sea trout and salmon running upstream from May onward.