At 6,300 feet Fool Hollow Lake Recreation Area offers a mix of Ponderosa (Pinus ponderosa), Pinyon Pine (Pinus edulis), and open meadows. White Pine (Pinus strobiformis), Fir (Abies spp.), Aspen (Populous spp.), and Oak (Quercus spp.) are also found locally. The open meadows host a variety of native bunch grasses and wildflowers. The USFS manages the forests in and around the recreation area. The USFS and ASP are implementing fire abatement projects at this time. The recreation area is located in the White Mountains, which have been the site of several large fire events; most recent was the Rodeo-Chediski Complex, which approached to within one mile of the recreation area.
Animals that make their home at Fool Hollow Lake include Elk (Cervus canadensis), Black Bear (Ursus americanus), Mountain Lion (Puma concolor), Fox (Vulpes spp.), Bobcat (Lynx rufus), Beaver (Castor canadensis), Squirrel (Spermophilis spp.), Porcupine (Erethizon dorsatum), Jackrabbit (Lepus californicus), and Cottontail rabbit (Sylvilagus sp.). The recreation area is also home to several avian species such as Osprey (Pandion haliaeatus), Bald Eagle (Haliaeetus leucocephalus), and several different raptors.
Like many areas of Arizona, Fool Hollow Lake Recreation Area is also home to non-native plants and animals. These non-native species arrive in a variety of ways; some species have been accidentally introduced and humans introduced some purposefully.