The water has made development possible and is used for farms, homes and businesses. Meanwhile, recreation has risen to over 4 million annual visitors in Glen Canyon National Recreation Area, with tourists bringing in over $420 million to local communities.
But climate scientists studying the Colorado River find the lake's water source is quickly declining.
Lake Powell is the second largest man-made lake in the United States, with more than 250 square miles of surface area.
Lake Powell and Lake Mead - the largest U.S. reservoir - are used to manage the Colorado River. A 1922 agreement split the river's flows between four upper basin states, including Utah, and three lower basin states.
According to Brad Udall, a water and climate researcher at Colorado State University, the lake is crucial for honoring the commitments laid out in that Colorado River Compact .
"Lake Powell is what the Upper Basin considers its bank account for meeting required deliveries to the three lower basin states. So, it's essential to the management of the river," Udall said.
When Lake Powell reached capacity on June 22, 1980, it was a wetter period of time for the region. Today, the lake is just above half full, and a large part of that is because of climate change.
"Since the year 2000, the flow of the river is roughly down 20% and about half of that decline is due to higher temperatures," Udall said.
And as states continue to use the water, lower flows mean there is less to store in Lake Powell and Lake Mead.
Even though extreme dry and wet years have fluctuated, the West is generally getting drier, said John Fleck, the director of water resources at the University of New Mexico.
"We really need to call [what we're experiencing] aridification - the drying out of the Colorado River Basin because of climate change, we can't just call it 'drought' anymore," Fleck said. "It appears to be this permanent phenomenon that's lowering the lake levels. You should not expect it to return to high lake levels over long periods of time. That's just not something we can expect to happen."
By 2050, researchers conservatively estimate the river will decline another 20% if precipitation patterns don't change. That spells out a dire situation for Lake Powell.
"40 years from now … I'd expect there to be a big bath tub ring," Fleck added.
This will have a significant impact for a region that relies on the lake for everything from drinking water and other residential and commercial uses to hydropower and recreation.
Lake Powell only makes up 13% of the Glen Canyon National Recreation area, but its water attracts kayakers, water skiers, swimmers and boaters.
Kane County Tourism Director Camille Taylor said she can't keep track of all the Lake Powell travelers. But anecdotally, tourism employees in Washington and Kane counties say 40% of their tourists make a stop at Lake Powell.
"Lake Powell is a tremendous asset - it's water in a desert, it might as well be gold," Taylor said.
And it's not just recreation that makes this water as precious as gold. Forty million people from seven states rely on the Colorado River.
While the river flow has declined, the demand for water has increased with regional growth. Upper and lower basin states are making drought contingency plans to keep Lake Powell and Lake Mead from reaching critically low levels.
Udall said states will also have to rethink those original water allocations from the 1920s.
"It's hard to balance the equities of trying to respect these agreements that people have planned on versus changing circumstances that make these agreements totally inappropriate for right now. And I don't know what the answer is but something's gotta give."
This story is part of ongoing coverage of the Colorado River, produced by KUER, and distributed by KUNC in northern Colorado.