In 1882 the California Southern Railroad built a line from Perris to Elsinore along the east side of the San Jacinto River. The Santa Fe Railroad bought the line and joined it with their line in San Bernardino. Floods in 1884, 1916, and 1927 washed out the tracks and the Santa Fe Railroad decided to abandon the line. Soon after the last flood the Temescal Water Company bought the railroad right-of-way, as well as 1,000 acres (4.0 km2) from Henry Evans, a rancher, and other land from B.T. Kuert. Those were the two parcels that make up most of Canyon Lake today. Construction started in 1927 to build a dam across the river to store water. It was finished in 1929. Railroad Canyon Reservoir, when built, was one of the largest fresh water lakes for fishing, hunting and camping in Southern California. The reservoir and the surrounding area was leased as a concession from Temescal Water Company as a recreational area under the operation of the George D. Evans family from 1937 until after World War II. After the war Ray and Alpha Schekel, along with John and Darleen Kirkland, operated the resort until 1949 when the lake was drained for repairs to the floodgates. Elinor and Donald Martin operated the resort from its reopening in 1953 until 1968. In 1968 the Corona Land Development Company developed the new community.

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