[3] The mouth of Mule Creek is located about 0.25 mi (0.40 km) west of the FM 600 bridge as it crosses the lake on the north side.

These small reservoirs grew insufficient for the growing town, and in 1919, the Clear Fork Brazos River was dammed just southeast of Lueders to form Lake Penick.

Horse, Buffalo, and Mule Creeks all flow directly into the lake and are part of the watershed.

The project consisted of a channel dam, pump station, and pipeline,[7] and cost an estimated $6.3 million.

Water levels in Lake Stamford fluctuate significantly, primarily due to extended periods of drought.

Since impoundment in June 1953 and initial filling, the lowest water level ever in Lake Stamford occurred on April 13, 2015.

On October 20, 2000, the lake was 15.8 feet (4.8 m) below conservation pool elevation, held 6,760 acre-feet (8,340,000 m3) of water, and was 13.1% full.

Though Amelia was weak and poorly organized, as it dissipated over Texas, it cause severe flooding.

On August 4, 1978, Stamford received its daily all-time record rainfall of 8.22 inches (209 mm).

[13] That same day, 29.05 inches (738 mm) fell on nearby Albany, the record daily rainfall for the entire state of Texas.

[17] Most of the rain was concentrated during the aforementioned four days, with the city receiving 4.52 inches (115 mm) on August 14, 2005, alone.

This caused extensive flooding to more than 340 homes, resulting in a disaster area declaration by Governor Perry.

The preponderance of this period's rains were north and west of Stamford, near Haskell and Hamlin.

[20] Then in June 2007, Stamford received 6.37 inches (162 mm) of rain[21] and by July 3, the lake was overcapacity by about 1.6 feet (0.49 m).

Beginning the last week of January 2010, the area received two to three times its average monthly precipitation, and February had notable snowfall.

Water levels eventually dropped below the spillway on December 5, 2010, the last time Lake Stamford was full until July 10, 2015.

This sale of water was fairly contentious among many area residents, who were not as confident as the city council that the lake could support such a significant new drain like a large power plant.

According to the contract, the exact amount of water to be taken can be adjusted according to a redefinition of the "safe yield", but is currently estimated to be 773 acre⋅ft (953,000 m3) per year.

AEP (formerly West Texas Utilities) owns a gas-fired electric generating power plant located at Lake Stamford.

Lake Stamford provides angling opportunities[27] with these species: Bass Catfish Crappie and others