The canyon is at the entrance to the mountains, where the South Platte emerges through the Rampart Range through the hogbacks onto Eastern Plains.
The narrowest part of the canyon is a remote and roadless gorge (Waterton Canyon) approximately 8 miles (13 km) long, at its lower extremity between the hamlet of South Platte and Kassler, where it emerges from the mountains.
In this area is a diversion dam that backs up water in the South Platte River, allowing some of it to be sent down the High Line Canal.
In the late 1920s, the Denver Board of Water Commissioners proposed building a dam to inundate the canyon, but the request was turned down by the Public Utilities Commission.
A 1.7 mile section of Waterton Canyon was inundated by the Strontia Springs Reservoir, completed in 1983 as part of the Foothills Project for water diversion.