The name "Wascana" is derived from the Cree word Oscana meaning "pile of bones" in reference to the plains bison bones scattered around Wascana Creek before the area was populated by non-indigenous people.
Wascana Lake was originally created in 1883 by damming Wascana Creek between Angus and Rae Streets, 1½ blocks west of the present Albert Street dam and bridge, to provide a "stock watering hole" — for the CPR's rolling stock. The lake was soon turned to recreational use and Regina residents took to the lake for sailing and canoeing. Its size was slightly reduced in 1908 when a new dam and bridge were constructed in their present location (Albert Street Bridge).
The lake continued for a time to be used as a domestic water supply and for stock watering; it also supplied the new Legislative Building. A longer term effect resulted, however, when lake water was used to cool machinery in the power plant (now the Powerhouse Museum) that was built in the eastern sector. Heated water returned to the lake, causing that sector to remain ice-free through the winter, and several species of migratory birds made it their year-round habitat. The eastern sector of the lake is now a waterfowl sanctuary.
Wascana Lake was drained and deepened in September 1931 as part of a government relief project. 2,100 men widened and dredged the lake bed and created two islands (Willow and Spruce Islands) using only hand tools and horse-drawn wagons.