The lake was formed due to a massive landslide at Attabad Village in Hunza Valley in Gilgit-Baltistan, upstream of Karimabad that occurred on 4 January 2010. The landslide killed twenty people and blocked the flow of the Hunza River for five months. The lake flooding has displaced 6,000 people from upstream villages, stranded a further 25,000, and inundated over of the Karakoram Highway. The lake reached long and over in depth by the first week of June 2010 when it began flowing over the landslide dam, completely submerging lower Shishkat and partly flooding Gulmit. The subdivision of Gojal has the greatest number of flooded buildings, over 170 houses, and 120 shops. The residents also had shortages of food and other items due to the blockage of the Karakoram Highway. By 4 June water outflow from the lake had increased to. Water levels continued to rise in 18 June 2010 caused by a difference in the outflow and inflow of the new lake. As bad weather continued, the supply of food, medicine and other goods was stopped as all forms of transportation including helicopter service to Hunza could not resume.
Aftermath of landslide
Victims of the landslide and expansion of the lake staged a sit-in protesting the lack of government action and compensation payments to them. As a result of the damming of Hunza River, five villages north of the barrier were flooded. One village, Ayeenabad, was completely submerged. Major portions of another village, Shishkat, was also submerged. Around 40% of the village of Gulmit, which also serves as the headquarters of Gojal Valley, was also submerged. Significant portions of land in Hussaini and Ghulkin villages of Gojal also got submerged as a result of the surging lake. The entire population of Hunza and Gojal valley, up to 25,000 individuals, were affected as a result of the lake, due to difficulties of road access and reaching business markets and loss of land, houses, and agricultural products. Attabad Lake has been visited by former Prime Ministers Yousuf Raza Gillani and Nawaz Sharif, and by the Chief Minister of PunjabShahbaz Sharif, Sharif announced Rs 100 million of aid for the victims from the Punjab government and Rs 0.5 million for the relatives of those who died in the landslide. Areas downstream from the lake remained on alert despite some officials believing that a major flood scenario was less likely as the river began flowing over the landslide dam during the first week of June 2010. Many people have been evacuated to 195 relief camps. Two hospitals downstream, the Kashrote Eye Vision Hospital and the Aga Khan Health Service, evacuated both their staff and equipment. Some officials had incorrectly predicted that as soon as the lake began flowing over the landslide dam, an wave would hit the areas immediately downstream. As of 14 June 2010, the water level continued to rise. DawnNews reported that "242 houses, 135 shops, four hotels, two schools, four factories, and several hundred acres of agricultural land" had been flooded, and that villagers were receiving food and school fee subsidies. They reported that of the Karakoram Highway and six bridges were destroyed. Frontier Works Organization blasted the spillway of the lake first on 27 March 2012 and then on 15 May 2012, lowering the lake's water level by at least.
Part of Karakorum Highway was submerged due to this landslide. On 14 September 2015, Prime Minister of Pakistan performed inauguration of realigned patch of KKH containing five tunnels at Attabad Barrier Lake. The five tunnels, together long, are part of the long portion of the Karakorum Highway which was damaged in 2010 due to land sliding at Attabad. The realignment project is a construction masterpiece completed at the cost of $275 million. The realignment restored the road link between Pakistan and China and it is expected that significant amount of trade will be conducted between China and Pakistan using it. The KKH is also a part of the China Pakistan Economic Corridor and is expected to significantly increase economic integration between those two nations.