Paxson Lake is known for its reliable fishing, popular for lake trout, Arctic Char and grayling. At the mouth of the lake, where the Gulkana River begins, the fishing for grayling is particularly good. The Bureau of Land Management operates a 50-site campground along the Richardson Highway at the lakeshore with a boat launch and other facilities. One of the most popular river float trips in Alaska is down the Gulkana, and many people start their trip at the Paxson Lake campground.

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