The dam serves mainly for irrigation water storage, flood control and hydroelectricity production, and impounds Don Pedro Reservoir in the foothills of the Sierra Nevada.

[11] The U.S. Bureau of Reclamation made tentative studies for a high dam on the Tuolumne River as part of its Central Valley Project, though it later dropped the plans in favor of other sites.

[13] In 1961, an overwhelming majority of voters in the TID and MID service areas and San Francisco approved bond issues to finance the construction of a new dam.

However, severe flooding on January 26 destroyed the cofferdam and all of the construction site's bridges, putting work a month behind schedule.

[17] For the next fifteen months, a fleet of massive 125-ton (113 t) dump trucks delivered an almost constant stream of dirt and rock to the site, and the dam wall rose at an average rate of one and a half feet (0.46 m) per day.

[17] After the clearing of over 7,000 acres (2,800 ha) of the future reservoir site and the relocation of several roads that ran through it, the diversion tunnel was closed and water began to rise behind New Don Pedro.

The rising lake submerged Old Don Pedro Dam on April 12, 1970 and inundated the Gold Rush town of Jacksonville by June.

The powerhouse and penstocks were completed by August 1970, after lengthy delays and setbacks due to the sheer scale of the generators, pipes and gates used in their construction.

Some of the individual components were so heavy that a truck delivering one of the penstock sections sank up to its trailer bed in the road, and another was crushed when the driver braked, inadvertently snapping the chains that held the load in place.

The total cost of the New Don Pedro Dam project, including site preparations, reservoir clearing and road relocations, was $115,679,000.

This entailed the construction of campsites, picnic areas, boat ramps, a landing strip, and hiking trails, including on 14 of the 33 islands in the lake.

[1] In 1923, the same year that Old Don Pedro was completed, the City of San Francisco finished construction of O'Shaughnessy Dam, which forms a reservoir in the upper Tuolumne River's Hetch Hetchy Valley and is the focus of one of the most longstanding environmental controversies in United States history.

[26] Increasing the height of New Don Pedro by just 20 feet (6.1 m) would add about 360,000 acre-feet (0.44 km3) to the reservoir's storage capacity, replacing most of the storage in Hetch Hetchy, though new tunnels would have to be built to deliver water from Don Pedro Reservoir to the Hetch Hetchy Aqueduct and there would be a net loss of hydroelectric generation from O'Shaughnessy.

[29] The proposed Red Mountain Bar Project would involve building a 465-foot (142 m) high dam across a canyon adjacent to Lake Don Pedro, creating a reservoir with a capacity of 25,000 to 42,000 acre-feet (0.031 to 0.052 km3).