In the mid-nineteenth century European settlers began to develop the Tolay Basin agriculturally along with the Sonoma Valley and Petaluma River Basin. Initially the Europeans compromised the natural earthen dam that impeded outflow at the southern end of the lake, primarily by dynamite. This hydrologic change reduced the lake size by approximately 50 percent and enabled more intensive grazing as well as growing of crops. The Tolay Lake basin's agricultural use expanded until about 1940 when the Cardoza family purchased the 1737 acre (7.03 km²) holding and called it the Cardoza Ranch.