Several times during the Pleistocene glaciations, the lake depression was occupied by a large glacial lobe of the Patagonian Ice Sheet, which formed a series of moraines along its western shore.

Sediment cores taken from Puyehue Lake in 2001 and 2002 have been interpreted as supporting the existence of the Little Ice Age in the Southern Hemisphere.

[6] A longer sediment core from the same site was used to reconstruct the evolution of the lake and its drainage basin during the last 18,000 years.

[10] The 2011 Puyehue Volcano eruption polluted the Golgol River, a source of the lake, killing fish.

[11][12] In the 16th century the lake was known to the Spanish as Llobén, from the Huilliche word of llofën meaning "abundant and continuous rain.