It begins near Browder Ridge in the Cascade Range and flows generally south through the Willamette National Forest to meet the larger river at Trail Bridge Reservoir, about 82 miles (132 km) upstream of the McKenzie's mouth on the Willamette River.

A United States Forest Service campground near the head of the lake is accessible only by boat from a launch at the south end of the reservoir, 1.8 miles (2.9 km) away.

[5] Smith Reservoir functions as a holding tank for water used to generate electricity at two power plants along the McKenzie River.

The Carmen–Smith Hydroelectric Project, owned by the Eugene Water and Electric Board, shunts water through a tunnel from the Carmen Diversion Reservoir on the upper McKenzie to Smith Reservoir, which has a bigger holding capacity.

The project, about 70 miles (110 km) east of Eugene, has a generating capacity of 114 megawatts (MW).