Aegagrophila linnaei has a worldwide distribution. Known throughout Europe in freshwater habitats where it is uncommon although very extensive in some low salinity parts of the Baltic Sea.
Outside Europe it has been reported from many counties including the United States, Russia, China, Australia and Japan.
The lake balls have been the source of much fascination and are on stamps issued in Iceland and Japan. In the Hokkaido district of Japan they are part of the local folklore where each year is held a 3-day ceremony focused on these balls.
Aegagrophila linnaei occurs in shallow water in rivers, lakes and coastal habitats such as coastal lagoons where the salinity is reduced.
Sometimes loose aggregations of filaments or lake balls lie over muddy, sandy or gravely bottoms and commonly accumulate along the downwind shore of ponds and lakes.
The dense cushion- and carpet-like growths are more common in the hard-water, moderately to slightly nutrient-rich rivers where often growing on the shaded sides of rocks.