Laguna de Masaya is a volcanic crater lake that sits directly beside the city, separated from the urban centre by a short walk to the Malecón (waterfront promenade). The lake fills one of the volcanic calderas of the same system as Volcán Masaya, and from the Malecón you get a view across the lake to the volcano on the far shore — a landscape that is simultaneously industrial and primally beautiful.
The lake has historically had water quality problems from urban runoff and volcanic activity, so swimming is not recommended. But the lakeside setting is pleasant for an evening walk or to catch the sunset, which on clear days illuminates the volcano in tones of orange and pink. Small boats sometimes fish on the lake in the early morning.
The Malecón, the city's waterfront strip, has been improved in recent years with benches, lighting, and a few food kiosks. It is a good place to end a day in Masaya, particularly if you have timed your visit to the volcano for the afternoon.