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Indawgyi Lake is particularly important for birds as it supports a large number of threatened species. The structure and diversity of the habitats around the lake provide the ideal environment for birds and is responsible for the high diversity in bird species. A total of over 450 species have been recorded for the lake and its surrounding catchments, containing more than 100 water bird and wetland dependent bird species, and more than 350 forest bird species. Indawgyi Lake is home to various breeding and resident birds including globally endangered species such as the Slender-billed and White-rumped vulture, the Sarus crane, or the Lesser adjutant stork.

Indawgyi Lake lies within the East Asian-Australasian Flyway that extends across 22 countries from the Arctic Circle, through East and Southeast Asia, to Australia and New Zealand. This flyway is used by more water bird species, and more globally threatened or near threatened species, than any other in the world with hundreds of thousands of birds using this migration path every year. Thousands of birds migrate to Indawgyi Lake between November and March including the Baer’s and Ferruginous pochard, the Eurasian crane, or the Pintail duck. Due to its regularly hosting of thousands of migratory birds from predominantly China and Siberia, Indawgyi Lake has been classified as a Flyway Partnership site in 2004, which assures a flyway-wide framework to promote the cooperation between the various stakeholders for the conservation of sites ranging from breeding grounds to non-breeding sites, including intermediate resting and feeding sites along the flyway.