The reservoir was put into service in 1965, but did not reach its optimal water level until 1971. Due to the great area of the reservoir, villages home to approximately 5,000 people had to be abandoned. The largest of the these, the village of Ganzee, had approximately 2,000 residents.
The dam was constructed in order to provide electricity to plants involved in the processing of bauxite into alumina, and later into purer aluminum metal. These plants were operated by Suralco, the Suriname Aluminum Company, which is a daughter company of Alcoa. About 75% of the dam's electricity was used to power these plants, and the portion of the electricity produced by the dam was used to power Suriname's capital city, Paramaribo.
According to the World Bank report "Good dams, bad dams" the Brokopondo dam flooded significantly more hectares of land per megawatt generated than any other large hydropower project analyzed. The report notes that Brokopondo inundated roughly 160,000 hectares of biologically valuable tropical rainforest, while providing only 30 megawatts of capacity.