The song was part of the Columbia River Ballads, a set of 26 songs written by Guthrie as part of a commission by the BPA, the federal agency created to sell and distribute power from the river's federal hydroelectric facilities, in particular the Bonneville Dam and Grand Coulee Dam. On the recommendation of Alan Lomax, the BPA hired Guthrie to write a set of propaganda songs about the federal projects to gain support for federal regulation of hydroelectricity.
Although the intended documentary film was never completed, Guthrie's songs were recorded in Portland, Oregon in May 1941. The tune for "Grand Coulee Dam" is based on that of the traditional song, "The Wabash Cannonball". Guthrie's recording was reissued on the Folkways album Bound For Glory in 1956, and subsequently on numerous compilations of Guthrie's songs.
"...[I]t remains arguable that, without recordings like [Donegan's] version of Woody's "Grand Coulee Dam", later performers (perhaps even Dylan himself) might not have beaten their way to Guthrie's door."