The dam provides flood control, groundwater recharge flows and hydroelectricity for the heavily populated San Gabriel Valley in the Greater Los Angeles metropolitan area.

In the 1920s, the Los Angeles County Flood Control District proposed to impound the San Gabriel River just below the confluence of the East and West forks with a 512-foot (156 m) high, 2,500-foot (760 m) long concrete arch dam to capture floods and provide water conservation.

To be named the San Gabriel Forks Dam, the project was canceled by the State Engineer after having convened an inquiry to investigate problems which were occurring at San Gabriel Dam site, including a landslide that destroyed a large portion of the construction site, in early November 1929.

[3] Water stored behind San Gabriel Dam is an important source for groundwater recharge during the dry season of April through October.

The dam supports two small hydroelectric plants producing a maximum of 4.95 MW and owned by the Department of Public Works.

[12] Water from the reservoir can be bypassed through a tunnel called the Azusa Conduit to another power plant downstream of Morris Dam.

At the time, this 2000 kilowatt (KW) plant drew water directly from the San Gabriel River.

The completion of San Gabriel Dam in 1939 ensured a steadier water supply for the power plant, and in the late 1940s a new 3000 KW facility was built to replace the old one.