Castaic Lake Water Agency facility at the Castaic Reservoir (aka Castaic Lake) in 1980, when CLWA began delivering State Water Project water to the Santa Clarita Valley.

Residents of the Newhall-Saugus Area (Santa Clarita Valley) voted April 24, 1962, to connect to the State Water Project, necessitating the formation of the Upper Santa Clara Valley Water Agency to wholesale the water to the local water retailers. The entity was renamed Castaic Lake Water Agency in 1970 as plans were in the works to build a reservoir to hold the water in Castaic. Construction on the dam started in 1967 and was completed in April 1972; The Castaic Reservoir, colloquially known as Castaic Lake — not to be confused with the original, natural Castaic (aka Castac) Lake in Lebec — opened for recreational use on Saturday, June 3, 1972.

Several local ranches, including the Cordova Ranch, were buried under water as the Castaic Reservoir was filled. A UCLA dig shortly beforehand uncovered numerous Indian artifacts, a few of which are on display at the Santa Clarita Valley Historical Society's museum. Some were displayed at the Castaic Lake Visitors Center until it closed; the artifacts were moved to the visitors center at Pyramid Lake, another man-made SWP reservoir. The whereabouts of the vast majority of the artifacts is unknown; it is believed they ended up in a basement at Cal State Northridge or Cal State Fullerton. Among the artifacts were numerous mortars and pestles, arrowheads, at least one obsidian spear point (which would have come to the area via a trade route from the east), and a mysterious, perfectly round stone disc, about 8 inches in diameter.