Muong Lay lies on the road between Dien Bien Phu and Lai Chau, in the far northwestern corner of Vietnam, on the banks of a recently created reservoir, was located in a valley on the banks of the Da River. When the decision was made to flood the valley to make way for the Song Da Reservoir as part of a hydroelectricity project, the old town of Lai Chau was relocated to a spot further along the river and renamed Muong Lay. At the same time, the provincial capital of Tam Duong nearly 90 kilometres away was renamed Lai Chau - a rather confusing turn of events for would-be travellers!

The countryside surrounding Muong Lay is stunning, and although the flooding of the valley originally caused a great deal of disruption to this peaceful region - today the lake has become an appealing part of the landscape. An attractive, newly built bridge spans the lake, linking either side of the valley, while boat trips available for those who would like to enjoy the scenery as they cruise across its glassy surface.