The Pine River Project is located in the San Juan National Forest in southwest Colorado about eighteen miles northeast of the town of Durango. Project lands are located in La Plata and Archuleta Counties and consist of about 69,000 acres of which about 16,000 acres are owned by the Southern Ute Indians.

The primary sources of water for the project are the Pine River and Vallecito Creek. The main features of the project are Vallecito Dam and Reservoir, which are located on the Pine River about 1.5 miles downstream from where the Pine River and Vallecito Creek merge.

Construction of Vallecito Dam began on May 14, 1938, and was completed in 1941. Vallecito Dam is a earthfill structure that is 162-foot-high and contains 3,738,000 cubic yards of material. The reservoir has a total capacity of 129,700 acre-feet. The spillway is a gate-controlled, concrete-lined open channel, 2,300 feet long at the right abutment. Features constructed by the Bureau of Reclamation are operated by the Pine River Irrigation District.

Vallecito Dam prevents the flooding of crops, farmland, and structures along the river during spring runoff by storing the floodwater for controlled releases to benefit irrigation. The Vallecito Reservoir has 125,500 acre-feet of reservoir capacity specifically assigned for flood control.

Recreation facilities at Vallecito Reservoir are administered by the Forest Service and the Pine River Irrigation District.  Activities include: camping, swimming, picnicking, boating, and fishing for brown, rainbow and brook trout.