The canal feeds Lake Lahontan reservoir in the Carson River watershed, where it is used for irrigation.

With passage of the act, the federal government assumed a major role in designing and constructing large-scale irrigation projects throughout the West.

The diversion dam is part of the network of water storage, diversion, and conveyance structures that provides water for irrigating about 73,000 acres (30,000 ha) of farmland in an area that receives less than 4.5 inches (110 mm) of annual precipitation.

"[1] Water diverted at Derby Dam to farms in Lahontan Valley constitutes as much as three-fourths of the flow of the Truckee River, the largest diversion of water from the Truckee River after it flows from Lake Tahoe.

But in 1979 a remnant population of the original Pyramid Lake cutthroat trout was discovered in a small brook on Pilot Peak, on the Nevada/Utah border.