It can be seen after the battle with the Groudon illusion created by Uxie. One Time Gear is placed in the center of the lake with Uxie guarding it. Fogbound Lake is located on top of a pillar with waterfalls flowing over the edges into lakes underneath. It is filled with many Illumise and Volbeat, which glow at night, which creates an amazing sight. Fogbound Lake is usually hidden by fog, hence the name, although the fog will go away if the Drought Stone is placed into the "heart" of a statue of Groudon near the front of Steam Cave.
Prior to the Guild's expedition, Uxie had protected the location of the lake by erasing the memories of explorers who had managed to overcome his Groudon illusion and reached him. During the Guild's expedition, the player and their partner found the Groudon statue. Due to a feeling that player had had many times before, the player and their partner figured out that the stone that their partner had picked up just before going through Foggy Forest, known as the Drought Stone, was needed in order to lift the fog. Corphish is also there with them at this time, and goes to tell the others about their discovery.
They try to go to Fogbound Lake, the player hoping to find out if Uxie was behind their memory loss. This was due to the player having a sensation that they have been here before. They manage to go through Steam Cave, and feel something. Around this time, Corphish takes the rest of the group to the statue, finding out that the player's team has gone on. They then feel the ground shake and go through Steam Cave. Around that area, Team Skull is lying on the ground, aching from Wigglytuff's defense against their attack.
Soon enough, the player and partner encountered the Groudon illusion. The two manage to defeat it and, after assuring Uxie that they meant no harm, are invited in as guests. They also find out that Uxie couldn't erase most of a being's memories, only the parts about Fogbound Lake, thus debunking the player's suspicions. After hosting the rest of Wigglytuff's Guild upon their arrival, Uxie, the guild having gained his trust, left their memories intact but requested that they promise not to tell anyone. Though the guild members kept their promise and claimed to have not found anything, an unrelated Time Gear thief managed to reach Fogbound Lake soon afterwards and stole its Time Gear.
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