Hanging Lake is located in Glenwood Canyon, about 7 miles east of Glenwood Springs, Colorado. The lake is reached via a trailhead located near I-70 in the bottom of the canyon. The trail follows Dead Horse Creek, a tributary of the Colorado River.
Early tales of the discovery of the lake tells of a man searching for gold in the canyon when the Colorado River was called the Grand River. The man found a dead horse at the opening of a gulch (the possible origin of Dead Horse Gulch). When he followed the gulch up through the steep hillside through the canyon he came around the backside of the lake. This is how he first saw the small bowl-like basin hanging onto the cliffs below.