During the summer, the lake is popular for water sports and beach activities. The two cities most identified with the Lake Tahoe tourist area are South Lake Tahoe, California and the smaller Stateline, Nevada; smaller centers on the northern shoreline include Tahoe City and Kings Beach.

Boating, the primary activity in Tahoe in the summer, is known worldwide. There are lakefront restaurants all over the Lake, most equipped with docks and buoys. There are all sorts of boating events, such as sailboat racing, firework shows over the lake, guided cruises, and more. Lake Tahoe also has its own Coast Guard.

Tahoe’s history began 2–3 million years ago when the faults that created the Carson Range simultaneously molded the Tahoe Basin. Eruptions from the extinct volcano Mt. Pluto formed a dam on the north side. The Pleistocene (Ice Age) molded the basin to its current form followed by drainage from ice and snow which filled the lake.

The area around Lake Tahoe was originally inhabited by the Washoe tribe of Native Americans. Lake Tahoe was the center and heart of Washoe Indian territory, including the upper valleys of the Walker, Carson, and Truckee Rivers. They called this area "Da ow a ga", which means "edge of lake". When early pioneers came they mispronounced this word, saying "Da ow", it later evolved into what we call it today, Lake "Tahoe".. Lt. John C. Frémont and Kit Carson were the first non-indigenous people to see Lake Tahoe. It was Fremont's 2nd exploratory expedition. On February 14, 1844, while searching for the Bonaventura river he first sighted the lake from Red Lake Peak in what is now the Carson Pass. After arriving at Sutter's Fort he designated it Lake Bonpland, in honor of the French explorer and botanist Aimé Jacques Alexandre Bonpland. John Calhoun Johnson, Sierra explorer and founder of "Johnson's Cutoff" (now Hwy 50), was the first white-man to see Meeks Bay and from a peak above the lake he named "Fallen Leaf Lake, California" after his Indian guide. His first employment in the west was in the government service, carrying the mail on snowshoes from Placerville to Nevada City, during which time he gave the name of Lake Bigler to that beautiful body of water now known as Lake Tahoe in honor of California’s governor John Bigler. In 1853 William Eddy, the surveyor general of California, identified Tahoe as Lake Bigler. In 1862 the U.S. department of interior first introduced the name Tahoe which continued a debate about naming the lake, in which both names were used until well into the next decade. It wasn’t until 1945 that it was finally and officially named Lake Tahoe. The compromise to partition Tahoe with 2/3 to California and 1/3 to Nevada was reached when California became a state. Putting the state line right through the middle of the lake and then at 39 degrees north latitude, the stateline obliques southeasterly towards the Colorado River. Upon discovery of gold in the South Fork of the American River in 1848, thousands of west-bound gold seekers passed near the basin on their way to the gold fields. European civilization first made its mark in the Lake Tahoe basin with the 1858 discovery of the Comstock Lode, a silver deposit just 15 miles (24 km) to the east in Virginia City, Nevada. From 1858 until about 1890, logging in the basin supplied large timbers to shore up the underground workings of the Comstock mines. The logging was so extensive that almost all of the native forest was cut. In 1864, Tahoe City was founded as a resort community for Virginia City, the first recognition of the basin’s potential as a destination resort area.

Public appreciation of the Tahoe basin grew, and during the 1912, 1913, and 1918 Congressional sessions, unsuccessful efforts were made to designate the basin as a national park. During the first half of this century, development around the lake consisted of a few vacation homes. The post-World War II population and building boom, followed by construction of gambling casinos in the Nevada part of the basin during the mid-1950’s, and completion of the interstate highway links for the 1960 Squaw Valley Olympics, resulted in a dramatic increase in development within the basin. From 1960 to 1980, the permanent resident population increased from about 10,000 to greater than 50,000, and the summer population grew from about 10,000 to about 90,000. Since the 1980s, development has slowed somewhat due to land use controls.