The lake is formed north of the dam, reaching 48 miles (77 km) to the Canadian border and 42 miles (68 km) further into British Columbia. The lake holds 13% of the water in the Columbia River system. The town of Rexford was moved, as well as the Great Northern Railroad line. The town of Waldo, BC is now covered by the lake. What was once a barrier to river travel, Jennings Canyon is now inundated by the lake.
Lake Koocanusa was named in a contest won by Alice Beers of Rexford, Montana. The name is made from the first three letters of the Kootenay (alternately, Kootenai) River, Canada, and USA.
Lake Koocanusa was built as a joint project of the U.S. and Canada. It is 26 km (16 mi) from Libby, Montana, also on the Kootenai River, from which the dam gets its name. The Libby Dam has a Visitors Center and can be accessed by the Lake Koocanusa Scenic Byway which begins in the nearby town of Libby, Montana.