Analysis of the formation of morphologically distinctive perched lava ponds produced in effusive basaltic eruptions focusses attention on the ways in which cooling and fluid dynamics interact to limit the distance a lava flow can travel. If a previously channelised flow spreads laterally on encountering a sudden decrease in the slope of the substrate or some other abrupt change in topography, its speed and thickness decrease progressively, in a way dictated by the requirements of mass and energy conservation. There is a consequent dramatic increase in heat loss from the lava as it thins. Where a flow spreads approximately radially in this way, it may form a perched lava pond. The high heat loss limits the size of any such pond to be at most a few hundred meters under almost all circumstances. Pond size depends much more strongly on lava volume flux than on any other physical parameter involved in the system, and the formation of these features provides a means of estimating eruption rates in paleo-eruptive episodes.