The river provided an early transportation corridor with reliable water power for industrial development of the city of Westbrook and the village of South Windham.

An artificial outlet was constructed through a moraine at the south end of Little Sebago Lake as an early 19th-century water power diversion to the Pleasant River via Ditch Brook.

On 4 June 1814, the diversion became enlarged by erosion as the lake level dropped 50 feet (15 m) within a few hours, draining great quantities of water into the Pleasant River.

The level of Little Sebago Lake was partially restored by construction of a dam which failed with similar downstream damage on 7 May 1861, and has been subsequently rebuilt.

The canal lock system provided elevation control of the 45-square-mile (117 km2) surface area of Sebago Lake as a reservoir for water-powered mills along the river.

The S. D. Warren Paper Mill in Westbrook vied with the Oriental Powder Company in Gorham and Windham to control water flow after the canal ceased operation of the locks.