The Mill at Anselma is a water-powered gristmill. Its location was carefully chosen for access to a water supply with enough flow and elevation to operate the water wheel.

The water source is a mill pond located approximately 100 yards from the Mill. The water is directed to this small holding pond by a channel known as the head race. An overflow area next to the head race keeps the water level from overflowing during heavy rains. Here, at the end of the pond, is a hand-wheel liftgate mechanism which controls the flow of water into the mill through an 18-inch cast-iron pipe.

Originally, the water would have been directed to the mill by an open wooden sluice, which was replaced between 1906 and 1909 by the pipe. The wooden water wheel was replaced by a steel water wheel at about the same time.

The mill pond is fed by the Pickering Creek, which is designated a High Value Stream within Pennsylvania Special Protection Waters.