Due to the peatland in the immediate catchment area, the reservoir is prone to a high acidity and discolouration in its water.

The building of the three reservoirs in the Upper Worth Valley (Watersheddles, Ponden and Lower Laithe), was so that the Keighley area could have a supply of fresh drinking water, and also in response to several droughts in the 1860s.

These droughts forced residents in the Upper Worth Valley to raid mill-ponds for drinking water.

c. cxxix) was passed to allow them to build: "...an aqueduct, conduit, or watercourse commencing in the hamlet or liberty of Oakworth, in the township and parish of Keighley, in the said West Riding, at a point situate upon the stream called White Reaps Clough, distant 132 yards, or thereabouts, from the junction of the said stream with another stream called Dean Clough, and terminating in the northern side of the intended Water Sheddles Reservoir (proposed to be constructed by the Local Board under the powers of "The Keighley Waterworks Extension and Improvement Act, 1869 ") at a point 35 yards to the south of another point 320 yards distant (measured along the highway next hereinafter mentioned) from the Standing Stone on the boundary between the counties of York and Lancaster, such stone being placed on the highway leading from Keighley to Colne, such termination being in the hamlet of Wycoller...."[3]So although the reservoir would dam the River Worth, it would be located 100 yards (91 m) over the county boundary in Lancashire,[4] a situation that still exists today, with the reservoir in the Borough of Pendle, but with a Bradford (BD) postcode.

[13][note 2][14] A deal was agreed with the mill owners along the River Worth that guaranteed a ready-supply of water; every morning and every evening, the sluices were opened to allow a regulated flow of water down the valley to enable the mills to restock their ponds.

[24] A report from 1897 relays how the water is cleared through limestone, coke, sand and "polarite",[note 3] but suffered from discolouration arising from peat sediment settling on the bottom of the reservoir.