The canal connects the Mississippi River to Lake Pontchartrain. It separates New Orleans East from the rest of the city of New Orleans, and the Lower 9th Ward from the Upper 9th Ward. Approximately half of the waterway's course, from Industrial Lock to a point north of the Florida Avenue Bridge, is confluent with both the Gulf Intracoastal Waterway and the Mississippi River Gulf Outlet (MRGO).

The entirety of the canal passes through the 9th Ward of the city. Along the riverfront, the canal constitutes the boundary of the Upper 9th Ward's Bywater neighborhood on the upriver side of the canal and the Lower 9th Ward neighborhood on the downriver side. Near the lake, it is generally considered to be the eastern boundary of the Gentilly neighborhood and the western boundary of New Orleans East.

In July 1914 the Louisiana State Government authorized the Port of New Orleans to build a deep-water shipping canal between the river and lake. Considerable land was expropriated in the downriver portion of the city. Toward the lake this was mostly little-developed swamp. Along the riverfront, though, buildings demolished to make room for the canal included homes and the Ursuline Convent, whose Dauphine Street facility was nearly a century old at that time.

Dredging of the canal began on June 6, 1918. The length from the lake to the lock near the river was constructed with a 30 foot (9 m) depth, with a width of 300 feet (90 m) at the top of the canal and at least 150 feet (45 m) at the bottom. The original lock system had 5 gates, a width of 74 feet (23 m), and a depth of 50 feet (15 m), with a capability to function to up to 20 feet (6 m) in difference of levels between the river and lake. The opening dedication ceremony was presided over by Louisiana Governor John M. Parker on May 5, 1923. The cost was 19 million dollars.

The original length of the canal was 5.3 miles (8.5 km) with a 1,600 foot (500 m) right-of way. The longer current length of 5.5 miles (8.9 km) is due to the extension of the lakeshore by dredging in the late 1920s.

A breach in the canal's levees resulted in the flooding of the Lower 9th Ward during Hurricane Betsy in 1965. Subsequently, concrete floodwalls were constructed to replace the levees.

In 2005, with the approach of Hurricane Katrina, storm surge funneled by the confluence of the Gulf Intracoastal Waterway's and MRGO's levees created multiple breaches in the canal's concrete floodwalls, including the spectacular failure of a quarter-mile length on the Lower 9th Ward side, resulting in catastrophic flooding. On the Upper 9th Ward side, the canal poured through a breach near Florida Avenue. On the opposite side, there were two breaches between Florida Avenue and Claiborne Avenue. A large barge, the ING 4727, floated through the breach closer to the river and was deposited in the Lower 9th Ward. The barge itself may have caused one or more of the breaches; this possibility is under investigation. The canal lock was functioning two days after Katrina hit, at first mostly for barges bringing in fill to repair the breaches. A month later Hurricane Rita reflooded recently drained areas along the canal by topping emergency fill at the breach sites. (WIKI)