Like the Black Sea, it is a remnant of the Parathetys Sea, being landlocked about 5.5 million years ago due to a tectonic uplift and a fall in sea levels. It is the largest enclosed body of water on Earth.

Several salt marshes can be found along the coastline, such as the Karabogaz Gulf. Numerous kinds of sturgeons (for caviar), trout, white fish and the Caspian seal call the Caspian home, and millions of birds winter at protected areas along its shores, including thousands of flamingoes and pelicans.