The headwaters of the river begin in Forest Canyon within Rocky Mountain National Park in Larimer County, Colorado. The river flows east, through Moraine Park to the town of Estes Park. There it is held in Lake Estes by the Olympus Dam before being released into the Big Thompson Canyon. The North Fork of the Big Thompson River also begins in Rocky Mountain National Park, on the northern slopes of the Mummy Range. This tributary flows east, through the town of Glen Haven where it merges with the Big Thompson River in the town of Drake in the Big Thompson Canyon.
From Lake Estes, the River descends 1/2 mile (800 m) in elevation through the mountains in the spectacular 25 mi. (40 km) Big Thompson Canyon, emerging from the foothills west of Loveland. It flows eastward, south of Loveland across the plains into Weld County and joins the South Platte approximately 5 mi (8 km) south of Greeley. It receives the Little Thompson River approximately 4 mi (6 km) upstream from its mouth.
On July 31, 1976, during the celebration of Colorado's centennial, the Big Thompson Canyon was the site of devastating flash floods that swept down the steep and narrow canyon, claiming the lives of 143 people, 5 of whom were never found. This flood was triggered by a nearly stationary thunderstorm near the upper section of the canyon that dumped 30 centimeters (12 inches) of rain in less than 4 hours (more than 3/4 of the annual rainfall for the area). Little rain fell over the lower section of the canyon, where many of the victims were. Around 9PM a wall of water more than 6 meters (20 ft) high raced down the canyon at about 6 m/s (14 mph), destroying 400 cars, 418 houses and 52 businesses and washing out most of U.S. Route 34.
This flood was more than 4 times as strong as any in the 112-year record available in 1976, with a discharge of 1,000 cubic meters per second (30,000 ft³/s). However, paleoflood data obtained from radiocarbon dating of sediments indicates that such flooding occurs in the area every few thousand years.
In 2008, a man who was thought to have died in the flood was found to be alive and living in Oklahoma. Darrell Johnson and his family had rented a cabin in Estes Park, but left without telling anyone on the morning of July 31. A woman who was researching the flood's victims discovered he was still alive.