Caddo Lake was the only natural lake in Texas until it was artificially dammed in 1914. Caddo Indian legend attributes the formation of the lake to a great earthquake and flood. Scientists however, believe the lake formed when floodwaters, blocked by massive log jams on the Red River, backed up into Cypress Bayou watershed, forming the lake.

Caddo began as a natural lake, but was dammed for flood control. Native and non-native aquatic vegetation covers approximately 95 percent of the lake's surface area in Texas.Inundated bald cypress trees scattered throughout this comparatively shallow water body and provide excellent fish habitat. Man made structures such as fishing piers and duck blinds also provide habitat for cover seeking species.

Largemouth bass is the most popular sportfish at Caddo Lake with good numbers of trophy-size bass (over 8 lbs) available. The lake also supports quality crappie, white bass, yellow bass, and bream. Channel, blue, and flathead catfish are present and provide a good seasonal fishing opportunities. Chain pickerel, a smaller cousin of the northern pike, is also present and frequently sought by anglers because of its sporting qualities.