The river originates in the Cascade Range near Mount Daniel and flows generally south, through Hyas Lake. The river is joined by many tributary streams including Waptus River and Cooper River, after which it enters Cle Elum Lake. Although a natural lake, Cle Elum Lake's water level and discharge is controlled by Cle Elum Dam, a 165 foot (50 m) high earthfill structure built in 1933. The dam and lake are managed for irrigation purposes by the United States Bureau of Reclamation as part of the Yakima Project., United States Bureau of Reclamation. Below the dam, Cle Elum River continues south to join the Yakima River on the west side of the city of Cle Elum.
A Northern Pacific Railway station at the future site of the city of Cle Elum was named Clealum after the Kittitas name Tie-el-Lum, meaning "swift water", referring to the Cle Elum River. In 1908, Clealum was altered to Cle Elum. This spelling came to be used for the river as well.