The old town of Dillon had to relocate to what is now the northeastern shore of Lake Dillon when the reservoir was completed in 1963. Silverthorne had its start as a convenient place to move the old buildings from the site of the old Dillon. The first general store and the first post office were old buildings that had been part of the old Dillon. Even the Old Dillon Inn which is noted for its "BA" sign – it actually is supposed to read "BAR", but the "R" has never been illuminated – was another building that originated in old Dillon. Even the cemetery from the town of Dillon was moved due to the formation of the reservoir.

The boom of recreational skiing which occurred in the late 1960s turned Dillon into a bedroom community for the seasonal workers who worked at the various ski resorts in Summit County. With the completion of the Eisenhower Tunnel which goes through the Continental Divide near Loveland Pass, commercial business also started to locate in Dillon. The town now enjoys a unique quality of life as a result of their fantastic alpine environment, and great outdoor activities.