Engineering studies began in October 1964, with early site preparation starting three years later. In 1972 its 1,080-megawatt pumped storage hydroelectric plant became operational as the largest such facility in the world.

The Northfield Mountain pumped storage hydroelectric plant was built entirely underground, and located about 5.5 miles (8.9 km) up the Connecticut River from Turners Falls Dam. A stretch of the Connecticut River, extending some 20 miles (32 km) north from this dam to the Vernon Dam, Vermont, serves as the station's lower reservoir. During periods of lower electrical power demand, the plant pumps water from this lower reservoir to a man-made upper reservoir. At times of high demand, water is released to flow downhill from this upper reservoir through a turbine generator, where it then collects in the lower reservoir to be stored until again pumped to the upper reservoir.

Northfield Mountain's upper reservoir covers 300 acres (1.2 km²) at 800 feet (240 m) above the river, with total storage of 5.6 billion gallons of water. Its underground powerhouse lies at 700 feet (210 m) below the surface and is accessible through a 2,500-foot (760 m)-long tunnel; it includes four large reversible turbines, each of which can pump about 20,000 gallons of water per second and generate 270,000 kilowatts of electricity.

The "lower reservoir" noted above is a pool along the Connecticut River above Turner's Falls Dam. Since the dam at Turner's Falls was raised in the early 1970s for Northfield Mountain, the banks of the Connecticut River have been re-adjusting to the new water level.