Brownlee Dam and Reservoir were named after nearby Brownlee Creek, which flows into the reservoir above the project. This creek was apparently named after the Brownlee family that settled the area in 1862. John Brownlee operated a ferryboat across the Snake River during the late 1800s.

In the 1940s, Idaho Power anticipated the need for a hydropower project in the area of Brownlee Creek. In 1947, Idaho Power applied for a license to develop the three-project Hells Canyon Complex on the Snake River.

This application led to a national debate that generated volumes of testimony in Congress and mountains of written and spoken words. The debate pitted two opposing factions. One faction favored public power and wanted the federal government to build one "high dam" with public funds. The other faction included Idaho Power and those who wanted private enterprise to develop the Hells Canyon resource.

Eight years later, on Aug. 4, 1955, the Federal Power Commission (now known as the Federal Energy Regulatory Commission, or FERC) issued Idaho Power a license to construct the Hells Canyon, Brownlee and Oxbow projects. Idaho Power began construction immediately, though the political battle wasn't won until 1958 when Congress rejected the fourteenth and last bill for a federal dam.

The original plant at Brownlee Dam was completed in 1959 and was the first of the three plants to be completed. To serve growing customer needs, Idaho Power added a fifth unit at Brownlee capable of generating 225,000 kilowatts in 1980. This addition increased the plant's nameplate capacity to 585,400 kilowatts. Brownlee's fifth unit is the largest generating unit in Idaho Power's hydropower system. It only operates during the Snake River's relatively short runoffs. Therefore, the additional peak production is generally limited to the late spring.