The Chaliyar originates in the Western Ghats range at Elambalari Hills in the Wayanad Plateau of Kerala[3] and flows through Malappuram District for most of its length and then for around 17 km it forms the boundary between Malappuram District and Kozhikode District before entering the city of Kozhikode for its final 10 km journey and finally empties into the Lakshadweep Sea at Beypore. Six major streams Chaliyarpuzha, Punnapuzha, Kanjirapuzha, Karimpuzha, Iruvahnipuzha and Thottumukkam Puzha (Cherupuzha) constitute the Chaliyar River drainage system. Other important tributaries are Kurumanpuzha, Pandipuzha, Maradipuzha, Kuthirapuzha and Karakkodupuzha. Most of these rivers have their origin in the Nilgiri hills in the east and Wayanad hills in the north, where they form a number of rapids and waterfalls.[3] Near the origin of river are the Meenmutty Falls at coordinates 11.527755°N 76.236534°E by Vaduvanchal, Wayanad

During late 19th century and early 20th century, the Chaliyar was extensively used as a waterway for carrying timber from the forest areas in and around Nilambur to the various mills in Kallai of Calicut city. Rafts made of logs were taken downstream during the monsoon season to Kallayi, where these were sawn to size in the timber mills dotting the banks of the river. Kallai was during this period one of the most important centers in the world for timber business. The place was famous for wood of superlative strength and durability like teak, rosewood, etc. Towards the second half of the 20th century, the activity came down drastically as tree felling was banned or strictly controlled with a view to stop deforestation. Many mills still operate in Kallai, though with far less output. Many have closed down.