The dam forms the 112,800-acre-foot (139,100,000 m3) El Capitan Reservoir and serves mainly to supply water to the city of San Diego as well as providing flood control.

The dam is connected to the San Diego municipal water system via the El Capitan Pipeline, which extends approximately 30 miles (48 km) to the city.

The bedrock canyon had ideal geology for a masonry dam, and the site was only 7 miles (11 km) from the city limits.

The reservoir would have flooded a large area of the Mission Valley (now downtown Santee, which was productive agricultural land at the time.

The City of San Diego favored a dam site at El Capitan, which was located more than 30 miles (48 km) further upstream.

The chief benefit of the El Capitan site was that it would create a narrower, deeper reservoir with a more efficient ratio of water storage to evaporation.

However, the site had a greater depth to bedrock and would require the construction of a more expensive embankment dam, as well as a longer aqueduct to transport water to the city.

[2] Native Americans of the Capitan Grande Reservation, part of which would be flooded by the proposed reservoir, opposed the project.

Some of the Indians insisted the city give them title to new lands before allowing them to move grave sites from the reservoir area.

[3] The initial act covered only the relocation of people and livestock in the reservoir flood zone, but later was extended to much of the watershed of the San Diego River above El Capitan, in order to protect water quality.

[3] Construction on the dam was financed by $4.5 million in revenue bonds issued in 1924, but even with voter approval, the project did not move forward until the 1930s, when San Diego finally won its case for the necessary water rights.

In 1931, the decision of whether a dam should be built at El Capitan or Savage's preferred Mission Gorge was held to a public vote.

The dam is situated in a narrow granite gorge, just below the confluence of Conejos Creek with the San Diego River.

[8] At full capacity, El Capitan Reservoir is about 8 miles (13 km) long and has a water elevation of 750 feet (230 m).

Since the dam is situated so high in the watershed, it has a limited capacity to control localized flooding along the lower San Diego River.