Grassy Lake is located on Grassy Creek, about a half mile upstream of Falls River, in a remote area of northwestern Wyoming just south of Yellowstone National Park.

Investigations at Grassy Lake Dam show that significant damage has occurred to the floor of the spillway and the toe-drain system. The damage is significant to present a serious risk of dam failure. Failure of Grassy Lake Dam would result in the loss of storage water for irrigation, recreational opportunities, fish and wildlife resources, and potential for loss of life downstream.

Designs for the modifications are underway, with a construction contract scheduled to be issued around January next year. Construction would take place during the summer months of 2004 and 2005.

Repairs to Grassy Lake Dam are part of Reclamations safety of dams program, which examines and evaluates the structural integrity of its dams and identifies potential public safety risks.

Grassy Lake and reservoir provide 15,200 acre-feet of storage for irrigation within the Fremont-Madison Irrigation District. The Fremont-Madison Irrigation District operates and maintains the dam, which is owned by Reclamation.

An interim operating restriction was placed on Grassy Lake Reservoir in 1999 restricting the winter and spring time operation to 5 feet below normal pool, and the summer operation to 1 foot below normal pool to safely pass a 100-year flood event.