Historians say the name Hells Canyon had its beginnings with a cargo ship pilot named Haller.

The story goes that Haller built a boat, the Norma, to haul downstream copper ore from mines located near present-day Oxbow, Ore.

In the Norma's first and only trip through Hells Canyon in 1895, Haller found the river rapids more than he had anticipated. Either because of what Haller said as he tried to pilot the boat or because of inaccurate repetition of the phrase "Haller's Canyon," the name Hells Canyon stuck. The wildness of the river and the nearly impassable steep mountain terrain more than likely reinforced the Hells Canyon name.

In the 1940s, Idaho Power envisioned the need for hydropower from Hells Canyon. In 1947, Idaho Power applied for a license to develop the three-project Hells Canyon Complex on the Snake River. After a bitter political contest with public power advocates who wanted to build one high dam in the canyon, the Federal Power Commission (now known as the Federal Energy Regulatory Commission, or FERC) issued Idaho Power a license on August 4, 1955, to build the Brownlee, Oxbow and Hells Canyon power plants.

The Hells Canyon Project was the last of the three projects to be constructed. With two of its three units, it began generating electricity in 1967. The third unit was put into full power production in 1968, for a total nameplate capacity of 391,500 kilowatts, or 391.5 megawatts (MW).

Hells Canyon is the deepest canyon on the North American continent, and the Hells Canyon Project is located at one of the narrowest points in the canyon. Before crews could even begin construction, a 23-mile access road was cut along the Idaho side of the canyon. Morrison-Knudsen, the contractor, set up trailer-type offices, a first aid facility, and machine and carpentry shops on a small strip of level ground two miles upstream. Housing and a mess hall for construction crews were built nine miles upstream.

The narrow canyon prevented crews from locating the switchyard adjacent to the powerhouse and generators, like most hydropower projects. Instead the switchyard was mounted on the dam's face. Helicopters helped move tools and equipment and were used to erect transmission towers. These towers support the transmission lines that carry electricity out of the canyon on the Oregon side.

Although construction crews had to work in a cramped and nearly inaccessible place, they built Hells Canyon Dam to full height in only six months.