This scheme was to be Sydney's fourth water supply system, following the Tank Stream, Busby's Bore and the Botany (Lachlan) Swamps.

The Pheasant's Nest weir, near the township of Wilton, diverts the water through a 7 km long tunnel to the Cataract River at Broughton's Pass, near the township of Appin, where a similar weir diverts the flow of the four rivers through a 58 km system of tunnels, aqueducts and open channels to Prospect Creek upon which the earthen dam wall is located.

Hudson Brothers of Clyde built a temporary raised pipe structure to deliver water from Prospect direct to the Botany Swamps.

[11][6] In 1895 a painting of the Prospect Reservoir was created by Arthur Streeton which was owned by the Metropolitan Water and Sewerage Board before being donated to the Art Gallery of New South Wales in 1937.

[6] With completion of Warragamba Dam in 1960, Prospect Reservoir continued to play an important role in storing Sydney's water.

A second pipeline linking Warragamba and Prospect was completed in 1966, significantly increasing the volume of water that could be transferred during peak demand periods.

Since its construction, parts of the area surrounding the reservoir have formerly been used for passive community recreation, and consequently the Water Board provided numerous parks and picnic facilities, primarily on its eastern side.

[14][6] From 2006 a new raw water pumping station and associated infrastructure were built on the reservoir's south-eastern side, including pipeline, power supply and access road.

The interconnecting tunnel is routed in a large U running from the Outlet Tower, into the hillside, then curving back to skirt the end of the Reservoir wall.

In the late 1970s the scour system was extended with twin concrete pipes and a new outlet structure constructed closer to Prospect Creek.

Later items associated with the Warragamba Supply Scheme and more modern developments include several more recent pumping stations, screening and boosting plants on the eastern and southern sides of the Reservoir, and the 84 inch (2,100 mm) water main from Prospect, to Pipe Head, completed in 1958.

The reservoir has a large recreational area on its eastern side with a number of park precincts that feature picnic spots, lookouts and BBQs.

The reserve is accessed by William Lawson Drive from Reservoir Road, which can be entered from Western Motorway to the north or Prospect Highway to the southeast.

[17] Prospect Reservoir is historically significant at the state level as it is a central element of the Sydney water supply system.

As a part of the Upper Nepean Scheme, the Reservoir has continued to supply water to Sydney for over 120 years, and generally still operates in the same way as it was originally constructed.

[6] Prospect Reservoir is strongly associated with the Harbours and Rivers Branch of the NSW Public Works Department, particularly Edward Orpen Moriarty, Head of the branch at the time of the Reservoir's construction, and later with the Board of Water Supply and Sewerage (later the Metropolitan Water and Sewerage Board) and most recently, with the Sydney Catchment Authority.

[6] The Reservoir area is aesthetically significant, as a picturesque site with a large expanse of water, parklands, landscaping and bush.

Later items associated with the Warragamba Supply Scheme and more modern developments include several more recent pumping stations, screening and boosting plants on the eastern and southern sides of the Reservoir, and the 84 inch (2,100 mm) water main from Prospect, to Pipe Head, completed in 1958.

[6] Prospect Reservoir and surrounding area was listed on the New South Wales State Heritage Register on 18 November 1999 having satisfied the following criteria.