Little Grassy Lake was built in 1940 as part of federal relief efforts surrounding recovery from the Great Depression.

[2][3] In 1959, activity around the lake increased when the Illinois Department of Natural Resources (IDNR) chose a land parcel near the Little Grassy dam as the site for its primary warm-water hatchery for the production of fish such as largemouth bass, bluegill, channel catfish, and redear sunfish for stocking.

[4] Little Grassy Lake is managed for warmwater fishing, with largemouth bass, bluegill, channel catfish, and crappie stocked and caught.

The spillway tends to operate during rain or snow meltwater runoff events in winter and early spring.

[7] The Pine Ridge Boy Scout Reservation is also situated on the Northeastern edge of the lake, almost a mile away from the dam.