Conrad devotes approximately 1000 words to description that establishes atmosphere as well as setting in "The Lagoon." Atmosphere, a term synonymous with mood, is established by diction (high, middle, or low), objects at hand, adjectives and adverbs, and character qualities related to the dominant feeling in a literary work. Bear in mind that though the atmosphere of a work may change from time to time through the progress of a work--though this is much less frequent in a short story--there is nonetheless a dominant atmosphere.

In the description that launches the story, Conrad establishes an almost dreamy atmosphere, perhaps supportive of the theme of illusion, through long flowing passages that describe the surroundings starting from a birds-eye overview and progressing to minute details such as the motion in the water. His diction in the descriptive passages is middle--not a high poetic lyrical diction nor a low colloquial diction--accessible to almost everyone. His vocabulary is simple with mostly English-derived words and few, if any, elaborate Latinate words:

A fleecy pink cloud drifted high above, trailing the delicate colouring of its image under the floating leaves and the silvery blossoms of the lotus.

In his descriptions, Conrad is liberal with adjectives and, in fact, suggests what the atmosphere, the mood, of the place is:

a suggestion of sad tenderness and care in the droop of their leafy and soaring heads.

Finally, his descriptions are liberally sprinkled with words that create a sense of gloom, darkness and sorrow, such as stagnant, marshy, black, ragged, droop, and gloom.