The reservoir was formed in 1980 by the construction of a dam by the Guadalupe-Blanco River Authority to provide a power station cooling pond for electric power generation.

Coleto Creek Reservoir is a venue for outdoor recreation, including fishing and boating.

Vegetation in the lake includes cattail, pondweed, American lotus, rushes, and hydrilla.

The Guadalupe-Blanco River Authority maintains a public park at the reservoir with recreational facilities for boating and fishing.

The reservoir has camp sites, picnic areas, cabins, a boat ramp for access to the water, a 200 feet (60 m) long lighted fishing pier, a 1.5 miles (2.4 km) hiking path, and restroom facilities.