Palo Duro Creek is formed in Texas from the junction of North Palo Duro Creek and South Palo Duro Creek north of Morse, Texas.^[1] The creek continues generally northeast until it becomes a tributary of the Beaver River (North Canadian River) in Oklahoma at a point east-northeast of Hardesty, Oklahoma, west of Balko, Oklahoma, and north of U.S. Route 412 near the Texas County/Beaver County line, downstream from the Optima Lake project.^[2]

North Palo Duro Creek in turn originates at about the Dallam County/Hartley County line east of Dalhart and west of Cactus in Texas.^[3] South Palo Duro Creek originates east of the Hartley County/Moore County line, west-northwest of Dumas, Texas.^[4]

Palo Duro Creek is impounded at Palo Duro Dam, about 10 miles north of Spearman, Texas.^[5] The dam was authorized in 1985.^[6] The reservoir was created for both water supply and recreation purposes.^[6] The earthen dam has a maximum height of 128 feet and a length of 3,800 feet, with a maximum storage capacity of almost 61,000 acre-feet.^[6] It was completed by the County of Moore (providing 72% of the funding),^[7] County of Hansford, and City of Stinnett in March 1991.^[6] But the reservoir has never reached more than a few percent of its capacity: both the creek and reservoir rely on surface runoff to fill, in an area with little rainfall and prone to drought.^[7]