Yellowwood State Forest was created in 1940 when federal land was leased to the state of Indiana. The land was deeded to the state in 1956. Prior to that time, the Civilian Conservation Corps and Works Project Administration completed three lakes, a shelter house and a residence, all still in use. Other such buildings were sawn from the forest in kit form and shipped to other public properties.
More than 2,000 abandoned and eroded acres were planted to pine (red, jack, shortleaf, white and scotch), black locust, black walnut, white and red oak. Red and white pines are the true northern pines and are still in good condition. The other pines are succumbing to insects, disease and extremely cold winters.
Yellowwood Lake was completed in 1939. The 133-acre lake is about 30 feet deep.