The dam is used for generating hydroelectric power and for flood control and is located about 12 miles (19 km) west of Burnet, Texas.

Construction of the then-named George W. Hamilton Dam was started in 1931 by a company controlled by Samuel Insull, but soon ended with the dam less than half completed when his highly leveraged public utility holding company collapsed during the Great Depression.

[5] Following completion in 1937, the dam was renamed for U.S. Representative James P. Buchanan, who helped obtain federal funding for the project from the Public Works Administration.

[5] Construction of the dam required the relocation of the town of Bluffton, Texas.

[6] Following a flood along the river in 1938, in which the dam was required to pass through all of the flow of water, there was criticism of the dam project as failing to meet its promise of preventing downstream floods.