This paper investigated the relationship between the annual variation of the algae population and the physicochemical properties of the water reservoired in the Gachang Dam in the hopes of serving as a guideline in the production of a clean water supply to regions of the city of Taegu. Summer thermal stratification was formed in the freshwater reservoired in the Gachang Dam and thus dissolved oxygen (DO) decreased according to the depth of the water. The pH of epilimnion was much higher than that of hypolimnion in summer because of the difference in the photosynthesis rate of algae. In July, at the beginning of the rainy season, the amount of total nitrogen (T-N) in the freshwater reached a maximum of 1.92 mg/L without an increase in the amount of total phosphorus (T-P). In August, the concentration of T-P in the freshwater increased steeply and reached 0.12 mg/L. Aulacoseira spp. (diatoms) were predominantly distributed in the freshwater throughout the year and Synedra and Asterionella (diatoms) predominantly populated in the spring. However, Anabaena and Microcystis (blue-green algae), which caused malodor and a bad taste, flourished predominantly in epilimnion in August when the temperature of the water at the surface region increased to the maximum and the concentration of T-P was sufficiently high.