The story opens in a small French village 10 years after World War II. The villagers refer to a small nearby lake known as the "lake of the damned." A group of young women go skinnydipping in the lake and are attacked by zombie Nazi soldiers who drown them. The zombies later leave the lake and attack women within the town. The mayor of the town (Howard Vernon) refuses to take action against the zombie attacks until reporter Katya Moore (Marcia Sharif) arrives to investigate.
After Moore returns a book to the mayor, they discuss the history of the town during the German occupation. His story is about a young Nazi soldier who protected a local woman from enemy gunfire. He was nursed back to health by the woman, who offered him her pendant and had sex with him. Returning to the woman later, the soldier finds her dying after giving birth to their daughter Helena. The soldier and his full squadron are then killed by a team of townspeople led by the mayor. Their bodies were disposed of in the lake.
The mayor says that he believes the zombies are the soldiers returning from the dead. Later, a female basketball team visiting the town is attacked by the zombies. Given the scale of the tragedy, the mayor calls the police, who send two detectives over to investigate. They too are killed by the zombies. The mayor then devises a plan to use the zombie's relationship with Helena by having her lure them into a mill. The zombies enter the mill, which is then destroyed by the villagers using flamethrowers.
Zombie Lake was initially going to be directed by Jesus Franco. Franco left the project after arguing with the film's distributor Eurociné. Eurociné asked Rollin to direct the film, and he entered production with only a few days notice. Julian de Laserna directed parts of the film under the supervision of Rollin. The final film credited them both under the pseudonym "J.A. Lazer". Rollin appeared in the film as Inspector Spitz.
The film was written by Julián Esteban and Eurociné producer Marius Lesoeur. Lesoeur was credited under the pseudonym of A.L. Mariaux.
The film had two separate editors. Claude Gros was the editor for the French and international versions of the film while Maria Luisa Soriano was the editor for the Spanish version.
The score by Daniel White was described by Tim Lucas in Video Watchdog as "taken from at least four other movies".
Zombie Lake was released in France on May 13, 1981, at a running time of 90 minutes.
Zombie Lake was released by Wizard Home Video on VHS.
The film was released on DVD first by Image Entertainment, as part of their Euro Shock collection, on March 27, 2001, and then by Arrow Films on February 9, 2004.
The film was released on Blu-ray and DVD by Kino on February 26, 2013.
Tim Lucas wrote in Video Watchdog that Zombie Lake was "an undeniably sloppy film". Lucas also noted the production quality citing poor make-up, score and acting from Anoushka. PopMatters gave the film a rating of 4 out of 10, declaring that it was not as good as the earlier Nazi zombie film Shock Waves. Glenn Kay, author of Zombie Movies: The Ultimate Guide criticized the acting and make-up in the film and stated that "the sound mix is one of the worst recorded for a feature film." Horror website Bloody Disgusting gave the film a 2 out of 5 rating, praising it as a non-typical zombie film, but criticized the cheap effects, calling it "crappy and terribly slow". Online film database Allmovie gave the film 1 of 5 stars, stating that "those looking for a better treatment of the same plot should consider Ken Wiederhorn's Shock Waves instead". Adam Tyner of DVD Talk rated it 0.5 out of 5 and described it as "pretty much unwatchable." In a mixed review, Gordon Sullivan of DVD Verdict wrote that it was only for hardcore Rollin fans. Writing in The Zombie Movie Encyclopedia, Peter Dendle described the film as a "mediocre horror piece but a biting satire of sentimental movies." Dendle called the makeup laughable and criticized the acting as uninspired.