The incident that made the lake better known was a conflict in 1854 between settlers and the Indians living in the Sevier Valley near Salina. John W. Gunnison was leading a U.S. government survey party west to find a possible "central route" to California. Gunnison's arrival coincided with a local incident in which four Indians were killed. Gunnison pursued his survey work and a few days later camped near the mouth of the Sevier River at the north end of Sevier Lake. Early next morning, the camp was attacked; Gunnison and six of his men were killed by retaliating Indians. Mormon settlers for a time were suspected of complicity because they were hostile to the government and hoped to keep the territory to themselves; but they were later cleared of any complicity in the matter.
As settlers continued to move to the area, irrigation was required to sustain life in the semi-arid climate. The Sevier River was the main source of water for irrigation for the area's farmers. Its flow was interrupted and retained in storage reservoirs to such an extent that the lake bed has been usually dry since the turn of the century. Mineral extraction from the brine at the south end of the lake has been attempted since 1985. Earthen dikes have been built to form 3,000 acres of first-phase solar evaporation ponds, and an eight-mile brine collection canal has been built, and salt deposited for competent pond floors in order to produce halite and potassium sulfate.