Yes, Watauga Lake in Tennessee is a man-made reservoir created by the Tennessee Valley Authority (TVA) in 1948. The lake was formed by the construction of Watauga Dam on the Watauga River, primarily for flood control, hydroelectric power, and recreation. Is There a City Under Watauga Lake? While no major city was submerged, the creation of Watauga Lake flooded several small communities in the area, including Butler, Tennessee. Known as "Old Butler", the town was relocated before the reservoir wa