Located near the southwestern corner of the monument is Lake Lucero, a playa lake (normally a dry lake bed), that contains water only during wet years. Even when the playa surface is dry, ground water is within three feet of the surface, allowing evaporation to continue. The water that collects in this playa is heavily laden with dissolved minerals and upon evaporation deposits gypsum, the major source of sand for the white dunes to the northeast.
Although most plants and animals don't tolerate the playa conditions, more than twenty species of protozoa, bacteria, algae, nematodes, and brine shrimp have been identified.
Spadefoot toads are seasonally abundant and use pools resulting from thunderstorms for breeding and egg-laying.
About the only plant that can tolerate the alkaline soils of the lakeshore is pickleweed, often called iodinebush (a relative of saltbush, a common plant on the edge of the dunes). An exotic species, saltcedar, or tamarisk, also has invaded the Lake Lucero area.
There is evidence for an early Pleistocene lake that inundated large areas in southern New Mexico, extreme west Texas, and northwestern parts of the State of Chihuahua, Mexico. This lake, Lake Cabeza de Vaca, was probably drained in mid-Pleistocene time. This resulted in several smaller relict lakes; Lake Otero in the Tularosa Basin is one of them.
Lake Otero may have covered from 1,600 to 1,800 square miles. This lake was at its maximum during the last glacial-pluvial time, about 12,000 to 24,000 years ago. Subsequent climate change to arid conditions resulted in a slow drying of the lake. Lake Lucero is a small remnant of these ancestral lakes.