At the beginning of July 1926, there was a rural valley stretching 10 miles between the rolling hills of Brookfield and New Fairfield to the ease and west and bounded by Danbury, New Milford, and Sherman to the south and north.  Dirt roads wound through the valley, passing 35 farmhouses, fording the Rocky River, and encircling five ponds whose shores were dotted with summer cottages.  An apple orchard and nearby mill were nestled in the south end of the valley.

On July 15, 1926, Connecticut Light and Power Company’s (CL&P’s) board of directors approved a plan.  It would be unique:  The first (large-scale)operation of pumped storage facilities in the United States.  By creating the lake and pumping it full of water from the Housatonic River then letting the water pour down an immense pipe called a penstock and into a turbine, the utility could produce electricity.

The plan went into effect almost immediately after the July 15th meeting.  Within weeks, an army of 50 surveyors swarmed into the valley, and lawyers were hired to process the deeds transferring land held by some families since before the American Revolution into the hands of CL&P.  The utility had the power of public domain and so the farms sold their land - $2,356 for 53 acres, $3,000 for 34 acres, $100 for 3 acres.

It took only 26 months to turn the valley into a lake.  Starting in late July 1926, nearly 1400 men labored to create Connecticut’s largest body of water.  About 500 of those men, imported by Maine and Canada, hand-felled 4,500 acres of woodland, burning the lumber in massive bonfires-reminiscent of Indian campfires that once burned in the valley centuries earlier.  Several dams were built.  The largest, at the north end of the valley, measured 952 feet wide and 100 feet high upon completion.

On February 25, 1928, the first pumping operation began pouring water into the valley from the Housatonic.  Engineers had planned on the Rocky River and its tributaries filling the valley one-fourth of the way, with the generating plant pumping the remaining three-fourths of the water out of the Housatonic.  The valley filled quickly and only 7 months later, on September 29, 1928, the water reached an elevation of 429 feet above sea level and Candlewood was considered complete. 

Even before the lake’s filing was completed, it became apparent it would become something more than the engineers had planned for - a lake of such beauty it would draw summer vacationers from as far away as New York City to gossip about the lake’s charms around the Northeast.  Land prices on what would become the shoreline had already jumped to an unbelievable $1,000 an acre and summer developments sprang up almost immediately.  Soon the area would be known for three things:  Hats, the Danbury Fair, and Candlewood Lake.