Because the Colorado River flowed through very flat terrain, the course of the river varied over a wide area, being periodically diverted in one direction or another by silt deposits remaining after floods. Sometimes the river flowed into the Gulf of California, as it does today; other times it turned westward toward the Salton Sink. Each time the Salton Sink received the river flow, a large freshwater lake called Lake Cahuilla formed. The last Lake Cahuilla covered much of the Imperial, Coachella and Mexicali Valleys as late as 1450. The most popular theory holds that the Algodones Dunes were formed from windblown beach sands of Lake Cahuilla. The prevailing westerly and northwesterly winds carried the sand eastward from the old lake shore to their present location which continues to migrate southeast by approximately one foot per year.
The dunes have frequently been a barrier to human movement in the area. Foot travelers frequently diverted south into Mexico, and in 1877 the Southern Pacific Railroad was diverted north to avoid the dunes, but in 1915 Colonel Ed Fletcher built a wooden plank road across the dunes to prove that cars could cross the dunes and to connect San Diego with Yuma, Arizona. This trail eventually became part of Interstate 8. During World War II, the U.S. military conducted desert warfare training on the dunes, which were part of the California-Arizona Maneuver Area. People have been driving on the dunes for recreation almost since vehicles first reached the area, which may have been the proving ground for the first dune buggy, a modified Ford Model A. Off-road driving surged following World War II when surplus Jeeps became available to the public
