Morris County has the largest forested area, with nearly 96,000 acres. The surface water of Highlands streams and reservoirs supplies drinking water to 3.7 million residents of 11 counties of northern and central New Jersey, most of whom live outside the region. Four of the six major surface supply systems for the northern part of New Jersey are located in the Highlands. The Pequannock Watershed, owned by the City of Newark, which serves 0.3 million, including half of Newark. The 35,000 acre watershed contains five major reservoirs - Canistear, Charlottesburg, Clinton, Echo Lake and Oak Ridge.
Round Valley is the state's largest reservoir.
It is the more permeable valley soils in the Highlands that serve as significant aquifer recharge areas, as opposed to the impermeable bedrock and thin soils typical of upland areas in the region. A Highlands resource of major significance is the extensive areas of uninterrupted, unbroken forest. Large blocks of forests, connected by corridors of habitat to other large blocks, are important factors in preserving biodiversity. Forest fragmentation, the creation of islands of habitat through land development and practices such as clear-cutting, decreases the amount of interior forest habitat which is essential to certain species of plants and animals. The Highlands also contains an unusual diversity of uncommon and specialized habitats.