This lagoon occupies a "maar" explosion crater, the result of a water table, located in one of the most active geological faults of the island of São Miguel.

Due to its genesis, the Congro lagoon has characteristics that distinguish it from most lagoons on the island. Its main characteristic is that it is embedded in the surrounding region, relatively flat, in the form of a large hole opened in the surrounding area, as opposed to occupying the top of a well-defined volcanic cone.

Source: Wikipedia