Previously, it had been a 10-foot-deep (3 m) freshwater lake, popular for recreation, until human activity caused an unusual disaster on November 20, 1980, that changed its structure and the surrounding land.

The hole produced a vortex that drained the lake into the mine, filling the enormous caverns that had been left by the removal of salt.

This backflow created for a few days the tallest waterfall ever in the state of Louisiana, at 164 ft (50 m), as the lake refilled with salty water from the Delcambre Canal and Vermilion Bay.

Their successful evacuation was thanks to the mine's electrician who noticed a torrent of water and sounded the alarm, as well as the employees' discipline and training making their escape via the only elevator in an orderly fashion.

Days after the disaster, once the water pressure equalized, nine of the eleven sunken barges popped out of the whirlpool and refloated on the lake's surface.

Since 1994, AGL Resources has used Lake Peigneur's underlying salt dome as a storage and hub facility for pressurized natural gas.