From the Super Mario Wiki
Kappa Mountain is the largest mountain on Yoshi's Island. It is the setting of many levels within the Yoshi series. Kappa Mountain first appeared in Super Mario World, in which it was the location of the Yellow Switch Palace. It is also possible that the Summit in Yoshi's Story is Kappa Mountain, but this has not been confirmed.
The name Kappa comes from a mythical creature in Japan, which has a water-filled, bowl-shaped depression on the top of its head. If the water runs out, the Kappas die. The lake in the middle of the mountain in Super Mario World looks like the head of a Kappa, and the whole mountain could be thought of a Kappa lying on its underbelly.