Pueblo Dam and Reservoir are the "terminal" storage facility for the federal Fryingpan-Arkansas water diversion, storage, and delivery project. Water collected from the upper reaches of the Fryingpan River is diverted under the Continental Divide via the Fry-Ark project, stored in Turquoise and Twin Lakes reservoirs, used to generate hydro-electric power at the Mt. Elbert Power Plant, and then released to the Arkansas River for eventual delivery into Pueblo Reservoir.
Water from Pueblo Reservoir is released through the dam to communities as far north as Colorado Springs and as far east as Lamar, Colo. All points in between and within the boundaries of the Southeastern Colorado Water Conservancy District, who represents the water users for whom the project was originally built, are eligible to receive Fry-Ark water.