With headwaters on Flat Top Mountain in eastern Summers County, the Little Bluestone River flows in a northeasterly, then a southeasterly direction until it joins the Bluestone River at the site of the former village of Lilly. Lying entirely in Jumping Branch District at a mean elevation of 1,500 feet, the Little Bluestone is a small river, only nine-and-a-half miles long. It has a cumulative tributary drainage of 34.86 square miles. The principal tributaries are Spicelick Creek, Parker Creek, and Suck Creek. Its most prominent physical feature is a waterfall at a point known as Fall Rock, the site of the last remaining gristmill in the county.

Lilly, razed but never submerged by the builders of Bluestone Dam, was named for Robert and Mary Frances Moody Lilly, the progenitors of the vast Lilly family in southern West Virginia, who settled near the mouth of the river in the late 1700s. Their son-in-law, Josiah Meador, a sergeant-major in the colonial army and Battle of Yorktown veteran, founded the Bluestone Baptist Church, one of the oldest Baptist churches west of the Allegheny Mountains, at the village.

The Little Bluestone has supported farming, timbering, and milling operations, and its lower reaches have been part of the Bluestone Dam conservation project since the 1940s.