Karakol is the administrative centre of Issy-Kul province and a good base from which to explore the lake. It was founded in 1869 after the commander of a nearby garrison realised that with its mild climate and fertile soil it was well suited for settlement. Today the town is famous for its surrounding apple orchards and there is a very good Sunday market.

Things to see include the Chinese mosque, which looks more like a Mongolian Buddhist temple and was built entirely without nails by Chinese artisans in 1920, and the Holy Trinity Cathedral. There are also good walks to be had in the valley of the Karakol River.