In the early 20th century, most of the wetlands and marshes surrounding the lake were drained for agricultural purposes, damaging the larger habitat.

The Upper Klamath National Wildlife Refuge has been established on land along the northern edge of the lake to preserve natural habitat.

The first recorded persons of European descent to visit Upper Klamath Lake were a party of Hudson's Bay Company fur trappers commanded by Peter Skene Ogden in December 1826.

However, they did not stay in the area for long, instead moving south to tributaries of the Klamath River in search of beaver.

In 1846, a military expedition led by John C. Frémont and Kit Carson were attacked by Native American warriors near Upper Klamath Lake.

Since 1917, the water level in the lake has been regulated by the United States Bureau of Reclamation (BOR)'s Link River Dam as part of the Klamath Reclamation Project, to supply irrigation waters to support agriculture in the upper Klamath Basin.

The algae blooms turn the water an opaque green in the summer and reduce the opportunity for recreational uses of the lake.

The BOR stopped withdrawing irrigation water for the Klamath Project in order to protect the sucker population.

[12] The future uses of Klamath Lake are of national interest because of competing claims between farmers' property rights (supported by federal subsidies and programs) and larger environmental goals.