Originally constructed in 1920 and expanded in 1948, the dam and reservoir are located in a remote part of the Los Padres National Forest.

Due to having lost a massive portion of its capacity to sediment build-up, the lake can often fill and spill after a single storm,[9] while drying up completely in some years.

[14] The Santa Ynez basin upstream is mostly wilderness and inflows are unregulated with the exception of the smaller Juncal Dam (owned by the Montecito Water District).

[18] The spillway is designed so that overflow water cascades down the natural sandstone face adjacent to the dam, creating a 150-foot (46 m) high waterfall.

[22] At the end of the Mission Tunnel is the 820 kilowatt Lauro hydroelectric plant, which was initially constructed in 1985 but was idled in 1998 due to increasing costs.

[21] The city sought to build a dam somewhere on the Santa Ynez River in order to increase the water supply available for Mission Tunnel.

[31] The Mission Tunnel was extended to the Gibraltar dam site, which would ultimately allow water to flow by gravity to Santa Barbara.

[34] Hazardous materials such as dynamite were not allowed inside the tunnel and had to be packed over the Santa Ynez Mountains on a primitive trail.

[34] The work was made even more difficult by the constant leakage of groundwater into the tunnel which formed "a continuous downpour from the roof in many places" and special care had to be taken to prevent contamination, since this water ultimately flowed into Santa Barbara's municipal supply.

[3] Aggregate used for concrete making was mined from the river bed and processed at a crushing/screening plant located about 200 feet (61 m) upstream from the dam.

"[34] The hole in the base of the dam was closed by a temporary valve before being concreted in from downstream, allowing the reservoir to begin filling.

This enabled more parties, such as the city of Santa Barbara, to file claims on surface water as long as the concept of "reasonable use" was observed.

[42] Immediately after its construction, the reservoir began to suffer from heavy sedimentation, a problem made worse by occasional wildfires in upstream areas.

[43] The flood of March 1938 was a major contributor to the large volume of debris run-off and caused $340,000 of damage downstream in the Lompoc area.

[46] After a seismic evaluation in 1983, Gibraltar Dam was rehabilitated by the U.S. Army Corps of Engineers after it was found at risk of failure from a strong earthquake.

[17] In 2017, the U.S. Bureau of Reclamation estimated the annual sediment inflow rate at 210 acre-feet (260,000 m3) or about 1.3 percent of its original design capacity per year.

[5] In the 21st century the reservoir has also been frequently at a low level, due both to persistent drought conditions and high water demand.

The 1989 Pass Through Agreement was designed under the assumption that, once Gibraltar reservoir is nearly full of sediment, it will be operated as a run-of-the-river project (serving only to divert water) with most of its storage functions transferred to Lake Cachuma.

[7] However, the Bureau of Reclamation predicts that the reservoir will not completely fill with mud; it will stabilize at about 2,000 acre-feet (2,500,000 m3) of water volume due to the "flushing action of high flows"[5] and that this level will be reached around 2031.

[13] The dam "altered downstream hydrology, sediment transport, stream habitat, [and] water quality" and also delayed steelhead migration during the early rainy season by holding back floodwaters that otherwise might have breached the sandbar at the mouth of the river.

A wide floodplain with a well defined stream channel was created, and is now home to typical California riparian woodland (willow, cottonwood and oak).

[53] The 2007 Zaca Fire burned much of the upper Santa Ynez watershed, causing huge amounts of ash-laden silt to flow into Gibraltar Reservoir.

[5] Organic material in the ash reacted with chlorine disinfectant in Santa Barbara's water supply to form carcinogenic compounds.

The shortest way to reach the dam on foot is a 6-mile (9.7 km) round trip hike along the Santa Ynez River from Red Rock Campground.