The reservoir was formed in the early 1970s as a result of the dam construction by the Hydro-Electricity Commission of Tasmania in order to create an upper storage for the Gordon Power Station, the largest and most controversial hydro-electric power scheme in Tasmania.

[2] Drawing from a catchment area of 1,280 square kilometres (490 sq mi), Lake Gordon is Tasmania's largest lake, with a surface area of 278 square kilometres (107 sq mi), with storage capacity of 12,359,040 megalitres (436,455.4×10^6 cu ft)[1] or 12.5 km3 (3.0 cu mi) of water, the equivalent of twenty-five times the amount of water in Port Jackson.

When the Tasmanian Government refused to halt work in the UNESCO-listed World Heritage Area, the Australian Government successfully sought a ruling in the High Court of Australia in Commonwealth v Tasmania.

[3] In early 2016, the lowest ever water supply levels in the lake were recorded during the 2016 Tasmanian energy crisis.

[4][5] However, by July of next year the drought had ended, and the lake had swelled by twenty metres over ten months.