The lake's name is a translation of the Cree Cheply Sakhahigan which means "place of the skeletons." A Cree chief is buried along the eastern shore of the lake.
There are now approximately 890 cottage and trailer sites around Skeleton Lake. There are 11 subdivisions surrounding the lake which are part of the County of Athabasca containing approximately 300 lots. As well, the Summer Village of Mewatha Beach with approximately 220 properties, the Summer Village of Bondis with approximately 195 lots and Shoreline Campground with approximately 170 sites are all located on the shores of Skeleton Lake. A public golf course is located in the Summer Village of Bondis on the east side of the lake.