The town is located at a point equidistant from Geelong and Warrnambool. A small Hamilton Highway town, Lismore lies just a few kilometres from the northernmost lakes in the Colac Lakes system. There are more than 50 lakes in the chain that spreads across the huge sweep of volcanic plains to the north of Colac. The largest lake, Corangamite, is three times saltier than the ocean and only a species of minnow which have an extreme tolerance to salt can survive in its waters.
The town features one of the state’s oldest private chapels, a Gothic revival style building built by Scottish emigrant Adam Robertson in 1867 from bluestone. There is also a large woolshed, capable of shearing 15,000 merinos, built by Robertson in 1841. The town and surrounding area still produces wool products including ugg boots.