B A Steinhagen Reservoir is located near the town of Jasper, Texas in the east Texas Piney Woods at 30.85 North Latitude and 94.19 West Longitude. The borders of Tyler County and Jasper County are defined by the bed of the Neches River, and therefore bisect the lake on a North/South line. The lake was created as part of a project that focused on creating lakes for recreation, power generation, and water conservation on the Neches River and the Angelina River. For many years, locals have referred to both the lake and dam as "Dam B".

The Neches River begins in Van Zandt County west of Rhine Lake and flows for 416 miles (669 km) through the piney woods of east Texas, defining the boundaries of 14 counties on its way to its mouth on Sabine Lake near the Rainbow Bridge. Two major reservoirs, Lake Palestine and B. A. Steinhagen Reservoir are located on the Neches. The Angelina River is a major tributary with its confluence at the north of Lake B. A. Steinhagen. Tributaries to the south include Village Creek and Pine Island Bayou, draining much of the Big Thicket region, both joining the Neches a few miles north of Beaumont. Towns and cities located along the river including Tyler, Lufkin, and Silsbee, although significant portions of the Neches River are undeveloped and flow through protected natural lands. In contrast, the lower 40 miles of the river are a major shipping channel, highly industrialized, with a number of cities and towns concentrated in the area including Beaumont, Vidor, Port Neches, Nederland, Groves, and Port Arthur.