Priest Lake, which is often referred to by the natives as "God's Country", was originally called Roothaan Lake by Father Desmet in 1846 in honor of his Jesuit Superior in Rome. One of the prominent peaks in the Selkirk Range still bears the name Roothaan.

In 1865, Captain John Mullan designated this same lake as Kaniksu Lake on one of his maps. It is believed that "Kaniksu" was the Indian name of Black Robe, although this has never been authenticated. The name was gradually changed in the early 1900's from Kaniksu Lake to its present name of Priest Lake, which refers to the early-day Jesuit missionary priests who had established a base camp at Kalispell Bay in the 1840's.

The lake is one of three largest and most beautiful lakes in the Idaho Panhandle, and a very popular recreation attraction. The world's largest Makinaw trout was caught here in 1963. Dolly Varden, Cutthroat, and Kokanee are also caught in the lake. It is now illegal to fish for Dolly Varden and they are to be returned to the lake when caught.

Upper Priest Lake is part of the Upper Priest Lake Scenic Area. There were five small parcels of private land totaling about 420 acres on Upper Priest Lake. The Forest Service purchased these tracts in 1967 with the assistance of Nature Conservancy. The entire shoreline of Upper Priest Lake is now in either the State of Idaho or Federal ownership, and is administered as a scenic area.

Upper Priest River, which flows into Upper Priest Lake, is one of the rivers to be studied for inclusion in the Wild and Scenic Rivers system along with the lower Priest River which was famous in the early days as a log-drive stream. The first recorded drive was in 1901 and the last in 1949. The greatest drive took place in 1931 when 50,000 cedar poles and 125,000,000 board feet or logs were herded down the river by the "river pigs".