Within reservoirs, production, transformation, and loss of dissolved organic matter (DOM) occur simultaneously. While the balance between production and loss determines whether a reservoir is a net sink or source of DOM, changes in chemical composition are also important because they affect DOM reactivity with respect to disinfection by-product (DBP) formation. The composition of the DOM pool also provides insight into DOM sources and processing, which can inform reservoir management. We examined the concentration and composition of DOM in San Luis Reservoir, a large off-stream impoundment of the California State Water Project. We used a wide array of DOM chemical tracers including dissolved organic carbon (DOC) concentration, trihalomethane and haloacetic acid formation potentials (THMFP and HAAFP, respectively), absorbance properties, isotopic composition, lignin phenol content, and structural groupings determined by 13C nuclear magnetic resonance (NMR). There were periods when the reservoir was a net source of DOC due to the predominance of algal production (summer), a net sink due to the predominance of degradation (fall–winter), and balanced between production and consumption (spring). Despite only moderate variation in bulk DOC concentration (3.0–3.6 mg C/L), changes in DOM composition indicated that terrestrial-derived material entering the reservoir was being degraded and replaced by aquatic-derived DOM produced within the reservoir. Substantial changes in the propensity of the DOM pool to form THMs and HAAs illustrate that the DBP precursor pool was not directly coupled to bulk DOC concentration and indicate that algal production is an important source of DBP precursors. Results suggest reservoirs have the potential to attenuate DOM amount and reactivity with respect to DBP precursors via degradative processes; however, these benefits can be decreased or even negated by the production of algal-derived DOM.