Lake James is part of the James Lake Chain which consists of a group of glacial lakes located in the northeastern corner of Indiana and part of Michigan. Lake James is the largest lake in this group of lakes, and also the fourth largest natural lake in Indiana. The drainage basin for this chain of lakes is . The northern boundary of this region is the community of Kinderhook, Michigan, and the southern boundary is just north of Angola, Indiana. The eastern boundary is on the east side of Fremont, Indiana, and the western side is just west of Lake James. Most of this region is within Indiana's Steuben County. The James Lake Chain watershed drains westward through the Middle Basin of Lake James into Jimmerson Lake, which is part of another watershed. Water from Jimmerson Lake continues westward over a dam at Nevada Mills, forming Crooked Creek. This creek flows northwest, becoming the Fawn River. Eventually, the Fawn River joins the St. Joseph River, which empties into Lake Michigan near the city of Constantine, Michigan.
