Tephras preserved in lake sediments are commonly used to synchronize sedimentary archives of climate and environmental change and to correlate them with terrestrial environments. They also provide opportunities to reconstruct volcanic explosive activity, e.g., eruption frequency and tephra dispersal. Although sedimentary processes may affect the record of tephras in lakes, lake sediments are generally considered as one of the best archives of tephra stratigraphy. The 2011-2012 eruption of Cordón Caulle volcano (Chile, 40°S) offered an ideal opportunity to study the processes affecting tephra deposition in lakes. Although the prevailing westerlies transported the erupted pyroclastic material away from nearby Puyehue Lake, the tephra was identified within this relatively large lake with a thickness ranging from 1 to >10 cm. This is in contrast with smaller lakes, where tephra thickness was in agreement with ashfall distribution maps. Geomorphological observations and sedimentological analyses provide evidence that the tephra deposited in Puyehue Lake entirely consists of material reworked from the upper watershed, transported by rivers, and distributed by lake currents according to particle size and density. Our results have important implications for tephrochronology and volcanology. They suggest that (1) lakes do not act as passive tephra traps; (2) lakes with large watersheds record more eruptions than smaller lakes, which only register direct ashfalls, affecting conclusions regarding the recurrence of volcanic eruptions; and (3) using lakes with large watersheds for isopach mapping systematically leads to an overestimation of erupted tephra volumes. Smaller lakes with limited drainage basins are generally better suited for volcanological studies.