The Shimane Peninsula, which now separates the two sister lakes, Lake Shinji and Lake Naka-umi, from the Japan Sea, was a hilly island during the post-glacial hypsithermal period, but was reconnected with the mainland (Honshu) a few thousand years B. C., due to the retrogression of the sea and the alluvial deposits of rivers. The water body, thus isolated from the sea by a sand bar (Yumigahama) at the eastern end and an alluvial plain (Izumo Plain) at the western end, was further split into the two sister lakes during the medieval age by the formation of the Matsue Plain. The Hii River, which once entered the Japan Sea directly, was deflected into the western end of Lake Shinji due to marine drift during the Edo Era (1600-1867 A. D.), accelerating the sedimentation and desalinization of the lake.

The present conditions of Lakes Shinji and Naka-umi were brought about by the dredging of a channel between the two lakes that started in 1922. The dredging reduced the danger of flood disaster on Lake Shinji's coasts, but helped the temporary invasion of brackish water from Lake Naka-umi into the lake, causing salt damage on coastal crop fields in seasons of drought. Lake Shinji is now a slightly brackish lake with a normal chlorine ion concentration of 1-2 g l^-1.

Agriculture used to be the prevailing industry in the drainage basin of Lake Shinji, especially on the plain along the Hii River. Since 1966, efforts have been made to establish a new industrial zone along the coasts of the two lakes, which will be turned into freshwater lakes on completion of the project. A new dam has recently been completed at the mouth of Lake Naka-umi leading to the sea to turn it into a freshwater lake which could be the source of water for industrial and agricultural use. The partial reclamation of Lake Naka-umi is now also under way. It is, however, expected that complete desalinization of the two lakes results in accelerated eutrophication as well as in a fatal damage on fisheries which has so far mainly depended on brackish water fishes and mussels. The long controversy between the responsible government bodies and the local opponents against the development project has very recently come to an end by the former's decision in 1988 to stop ongoing works temporarily for reconsideration of the whole project.

In January 1989 Lake Shinji and Lake Naka-umi were appointed as eighth and nineth "designated lake" based on the Law Concerning Special Measures for Preserving Lake Water Quality. The current Phase 6 Water Quality Preservation Plan administered by Shimane Prefectural Government under the supervision of the Ministry of the Environment covers the activities from 2014 to 2018.