First inhabited by Native Americans, the Sly Park area has a colorful history and continues to draw locals and tourists to its natural beauty.

In times past, members of the Maidu and Miwok tribes inhabited lush meadows—now covered by Jenkinson Lake— gathering acorns and other foods during the summer and fall. When the lake is low, grinding rocks can still be seen along the shoreline.  

In 1848, the Mormon Battalion stumbled upon the area on their way from Placerville to Salt Lake City. The group, consisting of 45 men, one woman, 17 wagons and 150 each of horses and cattle, was led by Captain James Calvin Sly who gave his name to the area. The battalion cut a trail to Carson Pass over what is now Mormon Emigrant Trail, a route that would later be used by other emigrants.

In 1853, Hiram O. Bryan and William Stonebreaker each claimed a 160-acre homestead east of the present main dam, calling their agricultural endeavor Sly Park Ranch. Luther Cutler bought the ranch in 1857 and built the first sawmill in the area. The meadow was a favorite stopping place for drovers driving cattle and sheep back and forth to the high country. Cutler saw opportunity in these migrations and built a 15-room hotel to accommodate cattlemen, teamsters and emigrants.

Sly Park was teeming with lumber mills in the late 19th and early 20th centuries, including the Phippins Mill, Hazel Valley Mill, and Placerville Lumber Company. The Blair family of Pollock Pines also operated a large mill east of the dam. A foundation and chimney can still be found on the eastern shore of the lake. In 1889, the Sly Park School District was established for children of mill workers; in 1927, the school property was sold.

The El Dorado Irrigation District (EID) first looked at Sly Park as a site for a reservoir in the 1920s. In 1944, Walter E. Jenkinson, the secretary manager of the district, asked the Bureau of Reclamation to investigate possible water storage sites in the county. Their study indicated the Sly Park/Hazel Valley project would be the most feasible. Spearheaded by Congressman Clair Engle, the dam was constructed as part of the American River Division of the Central Valley Project. Construction began in 1951, with water storage beginning in 1954. The current lake has a capacity of 41,000 acre-feet, providing the county with a two-year water supply.

In 2013, EID celebrated the 10-year anniversary of its purchase of the Sly Park Unit for $8.6 million from the Bureau of Reclamation. The purchase included the Sly Park Dam, Reservoir and Recreation Area; Camp Creek Diversion Dam and Tunnel; and all associated pipelines, conduits, tunnels and pumping plants—a purchase that gives EID control of 80 percent of its water supply and provides a secure source of water for the county. Sly Park also provides recreational and tourist opportunities, which are valued at $2.4 million annually and have become a sought-after location for shooting commercials and films.