Construction of the 9-foot navigation channel project on the upper Illinois River was started by the State of Illinois in 1921. The project was mostly complete by 1930 when the state ran out of money and stopped the project. The project was turned over to the US Army Corps of Engineers, who completed the project in 1933. The 1933 dam replaced an 1867 era dam. Various mills had dams at this location going back to 1832.

The Marseilles Dam and Marseilles Lock are unusual in that they are not in the same physical location. The lock is 2.4 miles downstream from the dam on a canal that was dug to bypass a large rapids in the main river channel. The main dam structure blocks the Illinois River, while it allows water to flow freely into the Marseilles Canal. The dam has side structures that also regulate the flow of water into the two mill raceway intakes. The main dam structure is about 600 feet long. It features submersible Tainter gates. These gates can be raised to allow water to flow under them in the summer, and then lowered to allow ice to flow over them in winter.