The Chippewa River is located in the Chippewa River watershed of the Minnesota River basin; it originates in northeast Douglas County and flows about 130 miles southwest to Montevideo, where it enters the Minnesota River. The watershed drains a 2,080 square mile basin. The Chippewa River flows through the counties of Douglas, Grant, Pope, Stevens, Swift, and Chippewa; portions of the counties of Otter Tail and Kandiyohi are included within the watershed.
The geology of the Chippewa River watershed includes a complex mixture of moraines and till, lake deposits, and outwash plains. The hilly moraines result in a high potential for erosion of sediment into streams. The northeast part of the watershed tends to be hillier, wooded, and more easily eroded, while the southwest portion tends to be flatter with more agricultural land use. Nearly 90% of the land is privately owned. Agriculture accounted for approximately 68% of the available acres in 1996. Corn and soybeans make up a majority of raised crops, and small grains, hay, and grasslands make up the majority of the balance.