Originally named Laguna Grande by Spanish explorers, it was renamed for the town of Elsinore, established on its northeastern shore on April 9, 1888.

The Temescal Creek in turn dumps into the Santa Ana River just northwest of Corona, California.

[4] Later in the early 19th century, the lake grew larger, providing Mexican rancheros, American trappers, the expedition of John C. Frémont, and the immigrants during the California Gold Rush a spot to camp and water their animals as they traveled along the southern shore of the lake on what later became the Southern Emigrant Trail and the route of the Butterfield Overland Mail.

The lake and the Laguna Rancho adobe built near the lake on its southwest shore at its western corner was described by Benjamin Ignatius Hayes, who stayed there overnight on January 27–28, 1850: In about 15 miles reach some timber where the hills approach near, apparently the termination of the valley of Temecula, a sort of low divide over which we enter into another valley.

Some good young grass, great deal of elder on its banks; as we rode along frequent flocks of geese rose from the shore; many shots at them; none brought down.

As we were moving along the lake, an Indian overtook us, running as if to catch up with us; said he was from Temecula and going to the mines; had a little pinole tied up in a handkerchief; spoke Spanish, seemed disposed to be communicative.

Road firm and good, gently ascending for a mile or more from the lake; then uneven, occasionally sandy, to Temescal.

Descriptions of the lake at this time say that large willow trees surrounding the former low-water shore line stood 20 ft (6.1 m) or more below the high-water level and were of such size that they must have been 30 or more years old.

As the lake surface continued to recede, a pumping plant was installed, and pumping was continued a few seasons, but the concentration of salts in the lake, due to the evaporation and lack of rainfall, soon made the water unfit for irrigation, and the project was abandoned by the company.

Since then a multimillion-dollar project has been put into place to maintain the water at a consistent level, allowing for homes to be built close to the lake.

On the west side of the lake are many small arroyos like the Lakeland Village Channel, which drains canyons whose source is on the east slope of the Elsinore Mountains.

The lake south of the Temescal Creek outlet lies in an open area at the mouth of its major tributary, the San Jacinto River, distantly bounded to the east by the Tuscany Hills and south of the river by the Sedco Hills both part of the range of the Temescal Mountains.