The 277,000 acre-feet (342,000,000 m3) lake is in Eldorado National Forest in the Sierra Nevada at an elevation of 4,870 feet (1,480 m).

It was formed in 1963 (62 years ago) (1963) by the 453-foot (138 m) high earth and rockfill Union Valley Dam on Silver Creek, which is a tributary of the American River.

It stores snow melt runoff during the spring and releases it during the summer when electrical demand is greatest to a chain of hydroelectric power plants downstream.

Union Valley Powerhouse at the base of the dam has a capacity of 46.7 MW and is operated as a peaking power plant, supplying electricity during times of the greatest demand.

Downstream from Union Valley Dam, Silver Creek waters are largely diverted through two additional powerhouses below small reservoirs before joining the South Fork American River a few miles north of Pollock Pines, California.