The loch was dammed in the 1930s, raising the water some 27 feet, in order to provide seasonal storage for the Galloway hydro-electric power scheme. As a reservoir, Loch Doon has an effective capacity of over 82 million cubic metres. When rainfall is plentiful, water is diverted to the loch from the Water of Deugh via a tunnel system. When water is required for power generation, water is released at Drumjohn to feed Kendoon power reservoir, the first in a series of generating stations and reservoirs on the Water of Ken.
During the construction of the scheme, the ruins of the castle were moved from an island in the Loch to the shore to avoid the rising water.