The dam impounds Lake Oroville, the second-largest reservoir in California, capable of storing more than 3.5 million acre-feet (1.1×10^12 US gal; 4.3×109 m3).

Since its completion in 1968, the Oroville Dam has allocated the flow of the Feather River from the Sacramento-San Joaquin Delta into the SWP's California Aqueduct, which provides a major supply of water for irrigation in the San Joaquin Valley, as well as municipal and industrial water supplies to coastal Southern California, and has prevented large amounts of flood damage to the area—more than $1.3 billion between 1987 and 1999.

However, major flooding in the 1950s prompted the 1957 passage of an emergency flood-control bill that provided sufficient funding for construction for a dam at Oroville – regardless of whether it would become part of the SWP.

[14][15] Groundbreaking on the dam site occurred in May 1957 with the relocation of the Western Pacific Railroad tracks that ran through the Feather River Canyon.

An average of 120 train cars ran along the line each hour, transporting fill that was mainly excavated from enormous piles of hydraulic mining debris that was washed down by the Feather River after the California Gold Rush.

[18] On December 22, 1964, disaster nearly struck when the Feather River, after days of heavy rain, reached a peak flow of 250,000 cu ft/s (7,100 m3/s) above the Oroville Dam site.

The water rose behind the partially completed embankment dam and nearly overtopped it, while a maximum of 157,000 cu ft/s (4,400 m3/s) poured from the diversion tunnels.

On October 7, 1965, two 40-car work trains, one fully loaded and the other empty, collided head-on at a tunnel entrance, igniting 10,000 US gallons (38,000 L) of diesel fuel, completely destroying two locomotives.

"[32] At around 7:30 am on July 22, 2009, several workers were deep below the reservoir operating flow controls to test a river valve chamber in the Oroville Dam.

When the flow reached 85%, suction pulled a breakaway wall downstream into a 35-foot (11 m) diversion tunnel, cutting lights and nearly sending three workers to their deaths in the roaring current.

[34] Following the accident, DWR entered into a 2012 agreement with Cal OSHA to hire a third-party expert to improve the safety of the river valve outlet system (RVOS) and make it operational again.

A senior civil engineer with the DWR was interviewed by the Sacramento Bee, and explained, "It’s common for spillways to develop a void because of the drainage systems under them", and "There were some patches needed and so we made repairs and everything checked out.

Heavy rainfall resulted in record inflows from the Feather River, and the spillway was opened in January to relieve pressure on Oroville Dam.

[40] Debris from the crater in the main spillway was carried downstream, and caused damage to the Feather River Fish Hatchery due to high turbidity.

[47] By 8:00 pm on the evening of February 12, the increased flow had lowered the water level, causing the emergency spillway to stop overflowing.

[52] On November 1, 2017, DWR director Grant Davis said, "Lake Oroville's main spillway is indeed ready to safely handle winter flows if needed".

[55] Things that added to the cost included relocating power lines, dredging the river downstream of the dam, as well as the discovery that the bedrock under the spillway was weak, necessitating deeper excavations and more concrete.

[57] The independent forensic team (IFT) was selected to determine the cause of the spillways incident, including effects of operations, management, structural design and geological conditions.

[60] On April 2, 2019, due to heavy rainfall upstream, the DWR began releasing water over the newly reconstructed spillway at a rate of 8,300 cubic feet per second (240 m3/s).

The DWR released an assessment, dated October 1, 2020, concluding that Oroville Dam was suitable for continued safe and reliable operation.

[62] Meanwhile, the Federal Energy Regulatory Commission has demanded that California submit a plan by September 2022, for addressing the issue of greater amounts of rain predicted in the future.

[64] After falling to a record low of 22% capacity by September 30, winter storms increased the lake level by December and the plant was restarted on January 4, 2022.

The pump-generators at Hyatt can lift up to 5,610 cubic feet per second (159 m3/s) into Lake Oroville (with a net consumption of 519 MW), while the six turbines combined use a flow of 16,950 cu ft/s (480 m3/s) at maximum generation.

[70][71] Water and power from the dam contribute to the irrigation of 755,000 acres (306,000 ha) in the arid San Joaquin Valley Westside and municipal supplies to some 25 million people.

[76][77] Oroville Dam completely blocks the anadromous migrations of Chinook salmon and steelhead trout in the Feather River.