The system was begun in the 1790s, beginning its life as a transportation canal called the Pawtucket Canal, which was constructed to get logs from New Hampshire down the Merrimack River to shipbuilding centers at Newburyport, Massachusetts, bypassing the 30-plus-foot drop of the Pawtucket Falls.

In the early 1820s, Associates of the recently deceased Francis Cabot Lowell bought up the old Pawtucket Canal in what was then East Chelmsford, Massachusetts.

The repurposing of the Proprietors of Locks and Canals allowed the Associates to sell water power to other companies, starting with the Hamilton Canal, leading to the explosive growth of the town, and then shortly thereafter, city, of Lowell.

The dam itself, which was built twenty years earlier, was lengthened at that time, diverting the entire Merrimack (during periods of lower flow) into the two canal system entrances above it.

[needs update] The level of the water is regulated by the flashboards and the metal pins that hold them back.