Gibson Lake/Cane Ridge IBA supports the one of only two known "interior" Least Tern nesting colonies east of the Mississippi River. The area also provides critical wetland habitat for migrating and wintering waterfowl, shorebirds, and gulls. Gibson Lake, located in the northern portion of this IBA, is a 3000-acre cooling reservoir owned and operated by Cinergy's Gibson Generating Station. Because of the introduction of warm water discharge created from coal-fired power generation, the lake stays open in the winter, offering habitat for thousands of geese and ducks when other local wetlands are frozen. Cane Ridge Wildlife Management Area (440 acres), a North American Waterfowl Management Plan project which is administered as a unit of the nearby Patoka River National Wildlife Refuge, is located directly south of Gibson Lake. The property was a cooperative restoration between the USFWS and Cinergy's Habitat Conservation Program to relocate the Least Tern colony from the splitter dike of Gibson Lake. In addition, Indiana's Department of Natural Resources owns the adjacent Tern Bar Slough Wildlife Diversity Area (840 acres), which will also be restored into a new tern nesting habitat. Coffee Bayou Natural Area, a state-dedicated nature preserve, is part of the proposed western boundary of this IBA. The 444-acre bayou is the largest remaining floodplain forest along the lower Wabash River.
Cane Ridge/Gibson Lake IBA is the only area in Indiana with regularly nesting Least Terns and represents the eastern-most breeding population of the "interior" Least Tern in the Midwest. Least Terns have nested in this area since 1986 (one pair) and at least 25 pairs have been noted each year since 1996. Until 2005, the terns typically selected the center dike of Gibson Lake as their preferred nesting habitat; in spite of intensive efforts to control the resident gull population, predation and abandonment at this location presented a population sink for the nesters. In spring of 2005, an isolated and protected island was made available to the Least Terns at the adjoining Cane Ridge Wildlife Management Area; this restoration effort appears to be a success with respect to Least Tern productivity. The Cane Ridge Area has also supported nesting Wilson's Phalaropes (including 4 hatchlings in 2002) and Black-necked Stilts (3 eggs found in 2005). This potential IBA also attracts good numbers of waterfowl, shorebirds, gulls, other terns, and wading birds at various times of the year, and first state records of Mountain Bluebird, Northern Wheatear, and Sharp-tailed Sandpiper have occurred in the area. In addition, wintering Bald Eagles and migrant Peregrine Falcons occur regularly, and the first confirmed nesting records for Cattle Egret, Snowy Egret, and Tri-colored Heron (all in 1996) have been discovered in the area.