The acidity of water of freshwater lakes and streams is predominantly determined by the soil and rock types of an area, since 90% of the water entering these water courses has passed through the ground. Only 10% of water in lakes and streams comes directly from rainfall. Consequently, areas that are most susceptible to freshwater acidification have an acidic geology such as granite and a peat-based soil. Areas that are affected by acidification include Scandinavia, Central Europe, Scotland, Canada, and the United States. Nevertheless, acid rain entering freshwater that is naturally acidic as a consequence of the underlying geology can place additional stresses on ecosystems dependent upon such freshwater environments. Lakes and streams that are generally regarded as acidified contain very nutrient-poor water.

Acid rain can enter the watercourse either directly or more usually through the catchment. If the catchment has alkaline-rich soil then the acid rain may be neutralised, and water entering the lake is of low acidity. However, if the catchment has a thin, alkaline-poor soil then acid water is passed to the lake. Acidification of a lake occurs over time. At first the natural buffering capacity of the lake neutralises the additional acidity entering the lake but at some point, the lake buffering capacity runs out and the acidity of the water increases rapidly. In time, the lake water stabilises at a certain acidity, maintaining a small number of species of plants and animals, but usually lacking many fish.

In addition to acid rain, a number of other factors can influence the acidity of freshwater, including the introduction of livestock into the catchment area and the use of nitrogen fertilisers.

The onset of acidification brings about a clearer bluer water body due to the settling out of decaying organic matter. Whilst the total amount of living matter remains largely unchanged, the diversity of different species drops considerably. Rushes thrive in acidified freshwater. White Sphagnum moss may invade lakes and form a thick green carpet over the bottom of the lake on account of the clearer waters allowing more light to reach the moss. Soft bodied animals such as leeches, snails and crayfish are early victims, often being one of the first signs of the commencement of acidification. Few insect species are very resistant to acidification and species such as mayfly disappear even under moderate acidification. However, species such as dragonfly larvae, water beetle and bloodworms can grow abnormally large in their population size when competition is removed. Salmon, trout and roach are particularly at risk from freshwater acidification, pike and eel being relatively resistant.