The town that gives name to the dam is literally only metres from what is, today, the main water supply for the eastern part of the Costa Del Sol.

La Viñuela reservoir collects water from the Río Guaro and its tributaries the rivers, Sabar, Benamargosa, Salía, Bermuza, Almáchar and Rubite. It was built on the bed of the río Guaro at the same position as the town of the same name, which is on the right side of the valley, while the booming hamlet called Barriada de los Romanes is on the left. Its covers a total of 700 hectares within the municipal boundaries and can hold up to 170 million cubic metres of water. As well as providing drinking water for the Axarquia region, it also allows for the irrigation of some 2700 hectares of agricultural land.