It was created in 1926 by the PPL Corporation for hydroelectric purposes as well as flood control; however, it is best known as one of several major recreational destinations in the Pocono Mountains.

[2] The indigenous Lenape people named the area "Wallenpaupack" which means "The Stream of Swift and Slow Water."

Upon his death it went to the Penn estate, which sold approximately 12,000 acres (4,900 hectares) in 1793 to James Wilson, one of the signers of the Declaration of Independence.

[3] In order to create the lake, PPL Corporation constructed a dam on Wallenpaupack Creek at Wilsonville and a levee named the Tafton Dike.

While homeowners have access rights, they must apply for permits for installing landscaping or exterior lights and cannot cut down vegetation to improve their view of the lake without a permit — a provision to keep the man-made lake's shore natural looking when viewed from the water and to minimize erosion.PP&L knows every rock and tree on this shoreline, and they are very good stewards of the lakeAccording to the Trewartha climate classification system, Lake Wallenpaupack has a Temperate Continental climate (Dc) with warm summers (b), cold winters (o) and year-around precipitation (Dcbo).

During the winter months, the plant hardiness zone is 5b with an average annual extreme minimum air temperature of −13.1 °F (−25.1 °C).

Ice storms and large snowstorms depositing ≥ 12 inches (30 cm) of snow occur nearly every year, particularly during nor’easters from December through March.

East Wallenpaupack Creek extends south through Newfoundland and into the northern edge of Monroe County.

Streams directly entering the lake include Waynewood, Goose Pond, Purdy, Strohs, Lyons and Beach House creeks, and Stony, Spring Hill, Seeleys and Mill brooks.

[11] Plans called for a spin-off to a newly created company Talen Energy formed from the generation assets of PP&L and Riverstone Holdings.

[12] In order to comply with a FERC regulation, on October 8, 2015 Talen Energy announced plans to sell the Lake Wallenpaupack hydroelectric project to Brookfield Renewable Partners L.P of Toronto, Canada.

[15] The lake's wooded shoreline provides opportunities for hiking and viewing wildlife, including whitetail deer and black bear.

[2] Kipp may be closed to the public until August because bald eagles have established a nest site on the island and return to it most years.

[18] The last weekend of August hosts Wally Lake Fest, a three-day weekend of events scattered on and around the lake and in the neighboring town of Hawley, including the live music Wallypalooza held on docks floating in front of the Tafton Dike.

[20] Lake Wallenpaupack faces a number of environmental problems, including water-quality issues from heavy boat usage, algal blooms and rapid sedimentation related to agricultural runoff, and an invasion of purple loosestrife along the shores.

[22] The lake is used as an educational resource to teach ecology to students of the Wallenpaupack Area School District.

[27] Statewide, deer over-population had had a negative impact on plant ecology due to over-browsing of ground cover and young trees.