A movement to build a dam on the Rio Grande started in 1896 when private promoters organized the Rio Grande Dam and Irrigation Company and were granted right of way for a dam and irrigation system on public property. Preliminary construction was started in November, but problems arose. Land owners in the El Paso area took a dim view of the project; they would lose water to upstream irrigation. Mexico, on the south bank, also depended upon the river for irrigation water. The United States Supreme Court intervened on the grounds that the Rio Grande was a navigable stream and could not be blocked. While floods were washing away the initial breastworks which had been put in place, the Federal Government blocked private enterprise and launched a similar scheme under the auspices of the Reclamation Service. Preliminary surveys started in 1903; an agreement with Mexico to deliver water was signed May 21, 1906; the project was officially authorized March 4, 1907. Actual construction did not begin until 1911. The dam was completed on May 13, 1916.

The dam was 306 feet high, 1,674 feet long, 16 feet wide at the top, and 205 feet wide at the bottom. The resulting lake, covering about 40,000 acres, filled a canyon on the Rio Grande to an average depth of 66 feet. It stretches 45 miles upstream and three miles across at the widest point. The shoreline is some two hundred miles long, and the lake had a capacity of 2.2 million acre feet of water. At the time of completion, it was the largest structure which had been constructed in the U S to impound water.

The reserve was named Elephant Butte Lake because of a hill in the center which resembles an elephant. In addition to providing for irrigation and flood control, the lake has become a boon to water-starved New Mexicans as a recreational facility Elephant Butte State Park was completed in 1965 and has become one of the most popular vacation spots in New Mexico. On Labor Day, the population exceeds 100,000 people and is temporarily the 3rd largest city in New Mexico. I combines boating, fishing, and other water-based sports with land activities such as camping, picnicking and hiking. Three Marinas; Del Sur, Rock Canyon and Dam Site provide concessionaires, boat launching ramps, rental cabins, restaurants, and stores for boaters, campers, vacationers and fishermen are available. Fish are caught year-round including bass, catfish, pike and crappie. Many special events are held there including the Balloon Regatta in April and the 4th of July fireworks spectacular.