Olivine Lake is the main setting for the "Little Lost Poliwag" settings. Olivine Lake is mainly a large lake that Squirtle, Poliwags, and Poliwhirl live at. A Haunter can also be seen around here that usually scares the Poliwag away. During the course of the "Little Lost Poliwag" activities, the player and Pikachu must find the Poliwag around the area. Olivine Lake features many dead ends that could result in lost time and more lost Poliwag. The Haunter isn't helping much either as it tends to show up out of nowhere and scare away any Poliwag. Sometimes, Pikachu will even fall into the water. During Part 2, the setting still appears to be at Olivine Lake, but much farther away since Poliwhirl is around.
Olivine Lake is also one of the main settings for the "Gone Fishing" activities. Squirtle can be seen watching Pikachu fish while a Haunter is seen flying around nearby. Sometimes, a Dratini may be caught here resulting in high points. Olivine Lake is considered a better fishing hole than Ochre Woods but not as good as Cobalt Coast.