The region around Kentucky Dam at one time belonged to the Chickasaw Indians. On October 19, 1818, this portion of western Kentucky was acquired by the United States as part of the Jackson Purchase. This famous land transaction added 8,000 square miles to the states of Kentucky and Tennessee. The Chickasaw received $300,000 over a fifteen-year time period for their lands. Former Kentucky Governor Isaac Shelby and General Andrew Jackson of Tennessee negotiated the purchase with the leaders of the Chickasaw Nation.
The U.S. Army Corps of Engineers had originally made field studies regarding the feasibility of building a dam on 
On May 19, 1949, the Tennessee Valley Authority officially turned over land to the Kentucky State Parks
System for the construction of Kentucky Dam Village. Between 1949 and 1955, the state spent over a million and a half dollars updating and improving this state park. Although the park began with a major group of buildings, the need for recreational facilities to make the park a major resort demanded a large infusion of money. A new 18-hole golf course was installed. There is also a convention center which seats 900, and a 4,000 foot lighted runway for light air traffic.
The Kentucky Dam Trail system is located on both TVA property and state park land. The Tennessee Valley 
The other section of the trail, which is also about one mile in length, was constructed by the Kentucky State Parks System along the shoreline of Kentucky Lake at Kentucky Dam Village. Both trail sections converge at the parking lot located on New Beach Road, just off of Hwy 641.
