Lake Llanquihue (41° 08′S 72° 47′W) has the second largest water volume in South America and is one of the most important recreational fishing destinations in Chile, accounting for 45% of the recreational fishing activity in the country. Simultaneously, the lake concentrates 33% of the non-native salmon and trout smolt farms which support the Chilean salmon aquaculture industry. We characterized the recreational fishing activity at Lake Llanquihue and estimated its economic benefits. We used the Travel Cost Method and count data techniques to estimate the recreational fishing demand of anglers surveyed on site from 1995 to 1996. The main fishes captured were rainbow trout, Oncorhynchus mykiss, by bank anglers (59%) and Coho salmon, O. kisutch, by boat anglers (57%). We obtained social welfare estimates that varied from 3,336,700 US$ to 5,337,500 US$. These economic benefits indicate the importance of recreational fishing compared to alternative uses of the lake, like smolt production, which in 1995–1996 generated net benefits from 19.2 to 36.9 million US$. The information obtained from this study is pertinent to the management of recreational fisheries in the freshwater ecosystems of southern Chile.