Dallol lies in the evaporitic plain of the
Danakil Depression at the
Afar Triangle, in the prolongation of the
Erta Ale basaltic volcanic range. The intrusion of basaltic magma in the marine sedimentary sequence of Danakil resulted in the formation of a
salt dome structure, where the hydrothermal system is hosted. The age of the hydrothermal system is unknown and the latest phreatic eruption that resulted in the formation of a diameter crater within the dome, took place in 1926. The wider area of Dallol is known as one of the driest and hottest places on the planet. It is also one of the lowest land points, lying below mean sea level. Other known hydrothermal features nearby Dallol are
Gaet'Ale Pond and Black Lakes. Although several other hyper-acidic (pH < 2) volcanic systems exist, mainly found in crater lakes and hydrothermal sites, the pH values of Dallol decrease far below zero. Parts of the region are nearly sterile, except for a diverse array of "ultrasmall"
archaea. Dallol is highly dynamic; active springs go inactive and new springs emerge in new places in the range of days, and this is also reflected in the colors of the site that change with time, from white to green, lime, yellow, gold, orange, red, purple and ochre. In contrast to other hydrothermal systems known for their colorful pools (e.g.
Grand Prismatic Spring), where the colors are generated by biological activity, the color palette of Dallol is produced by the inorganic oxidation of the abundant iron phases. ==Absence of life==