NASA's New Horizons mission performed the first flyby of a small Kuiper Belt Object (KBO), (486958) Arrokoth on 1 January 2019. The fast flyby revealed a fascinating, flattened, contact binary replete with a variety of unexpected geologic terrains. However, the irregular shape and constraints imposed by the fast flyby makes it a challenge to understand these features. Here we use the latest New Horizons shape models of Arrokoth to investigate its geophysical environment, including its surface slopes, gravity field, and moments of inertia—which are critical context for understanding Arrokoth's formation, evolution, and peculiar geology. We find that Arrokoth's surface features have a complicated relationship to its geophysical environment. For example, bright material tends to be concentrated in geopotential lows (like the neck), consistent with mass wasting—however, this trend is not consistently observed across Arrokoth. Mass wasting may naturally explain some aspects of Arrokoth's geology, but the actual dynamics of material transport may be complicated owing to Arrokoth's unique shape, spin‐rate, and inferred density. While New Horizons's fast and distant flyby precluded directly measuring Arrokoth's mass, we used techniques previously pioneered for comets and asteroids to infer its density. We find that Arrokoth has a low bulk density of ρ = 235 kg/m3 (1σ range: 155–600 kg/m3). This density is low compared to previously explored small bodies, but is comparable to comets, select binary KBOs, and the ring‐moons of Saturn. This low density may be a critical data‐point for understanding the formation of planetesimals at the dawn of the Solar System.