This painting is accompanied by two letters from the artist written in 1866 and 1867 to Mr. R. Nichols discussing purchase negotiations. Bierstadt first offered his client a painting resembling, but smaller than (36 x 44 in.) Storm in the Rocky Mountains, the monumental work now in the collection of The Brooklyn Museum. Mr. Nichols, however, was interested in a smaller painting, for the artist wrote: "I called in to see you and ask if you wished to buy a picture which I think would please you in every respect, it is not quite as large as the one I formerly sent you, full of light and would look well in the evening by gas light...The picture I refer to is a view of Lake Tahoe, California and is worth two thousand dollars."

The decade of 1860-1870 was one of tremendous productivity, panoramic painting, and worldwide recognition for Bierstadt. He painted and exhibited his The Rocky Mountains, Lander's Peak (1863), and Looking Down Yosemite Valley, California (1865), both of which critics compared to Frederic Church's Heart of the Andes as well as Storm in the Rocky Mountains (1866) and Among the Sierra Nevada Mountains, California (1868). Bierstadt was also contracted by the House of Representatives to paint two major works for the Capitol. Lake Tahoe was made during this peak in the artist's career and more specifically in the first few weeks of 1867 when Bierstadt was travelling in the West.