Lake Forest has two lakes from which the city gets its name. The lakes are man-made, and condominiums and custom homes ranging from large to small line their shores. Neighborhood associations manage the lakes. Lake 1, known as the Lake Forest Beach and Tennis Club, and Lake 2, the Sun and Sail Club. Each facility features tennis courts, gyms, basketball courts, barbecue pits, volleyball courts, multiple swimming pools, saunas, hot tubs and club houses for social events.
The "forest" for which the city is also named lies in the area between Ridge Route, Jeronimo, Lake Forest and Serrano roads, and consists mostly of Eucalyptus trees. It is also man-made, and was created in the first decade of the 1900s when a local landowner, Dwight Whiting, planted 400 acres (1.6 km2) of Eucalyptus groves in the vicinity of Serrano Creek as part of a lumber operation intended to draw development to the area. In the late 1960s, the Occidental Petroleum company developed a residential community in and around the Eucalyptus groves, which had long since expanded and grown much more dense.