The Teton Dam was an earthen dam constructed between February 1972 and November 1975 by Morrison-Knudsen authorized by the Federal Bureau of Reclamation. It stood 305 feet high and was primarily designed for irrigation purposes to support local agriculture. On October 3, 1975, the dam began to be filled. In the Spring of 1976, the fill pace was accelerated due to heavy snowfall runoff, which increased the original filling rate from one foot to four feet per day.

On June 5, 1976, the dam's structural integrity was compromised when the first leak was detected early in the morning. Despite efforts to plug the leak with bulldozers, the situation worsened, culminating in a catastrophic breach at 11:57 a.m. Approximately 80 billion gallons of water rushed through the gap, inundating the surrounding areas. Within minutes, the floodwaters reached devastating heights of 10 to 30 feet, impacting nearby communities of Wilford, Sugar City, and Rexburg.

The flood resulted in 11 fatalities and extensive property damage, with about 90% of residents in affected areas losing 90% of their possessions. Some evacuees found refuge at Ricks College (now BYU-Idaho), which served over 386,000 meals to survivors. As waters continued southward, Idaho Falls managed to mitigate some damage through proactive sandbagging efforts, while the farthest south effected communities, Firth and Blackfoot, faced severe flooding. The flood waters were finally contained at the American Falls Dam three days later.

The disaster severely disrupted communication and transportation due to downed power and phone lines and destroyed roads. In response, Congress passed a $200 million relief bill to assist victims, and housing was provided rent-free for a year through HUD. Most affected towns were rebuilt within a year, aided by government support and community volunteers.

The dam has never been rebuilt, and the site remains accessible to visitors to this day. The Teton Dam Flood prompted the establishment of the federal Safety Evaluation of Existing Dams (SEED) program to enhance the safety regulations governing dams across the country.