The lake was formed by the 1872 Lone Pine earthquake. Some larger areas of the Owens Valley dropped approximately 20 feet and a new spring opened, causing water to fill the lowland to form the lake. The lake was named after the Diaz family from Chile who established a ranch here in the 1860s.
There is a campground nearby offering some 200 spaces, also for lagerer RVs. No shower facilities within the campground.