A self-taught engineer, he took ditch-digging work in San Pedro with the Los Angeles Department of Water and Power and eventually became head of that agency. Few positions in local government have had such an effect on a metropolis—Los Angeles is a chaparral-covered desert that was transformed by sprinklers, pipes and Mulholland's public waterworks. Mulholland's offices were on the top floor of Sid Grauman's Million Dollar Theater.
The 233-mile Los Angeles Aqueduct, completed in November, 1913, took water from the Owens Valley in Central California in a project requiring over 2000 workers and 164 tunnels. Water reached a reservoir in the San Fernando Valley on November 5. At a ceremony that day Mulholland spoke his famous words about this engineering feat: "There it is. Take it."
The aqueduct drained the 100-square-mile Owens Lake absolutely dry by 1928, which started the California Water Wars (a fictionalized form of the story was the basis for the film Chinatown). The acquisition of water rights had been underhanded and Owens Valley farmers resisted violently, even dynamiting the aqueduct at Jawbone Canyon in 1924, by opening the Alabama gates and diverting the flow of water for four days, and raising prices. Los Angeles was forced to negotiate, and Mulholland was quoted as saying he "half-regretted the demise of so many of the valley’s orchard trees, because now there were no longer enough trees to hang all the troublemakers who live there."
Mulholland's career ended fifteen years later, on March 12, 1928, when his St. Francis Dam failed just hours after being inspected by Mulholland himself, and sent 12.5 billion US gallons (47,000,000 m³) of water flooding into the Santa Clarita Valley, north of Los Angeles. A 10-story wall of water rolled down the Santa Clara riverbed at 18 mph (29 km/h) towards the sea at Ventura, and the next morning revealed unbelievable catastrophe. The town of Santa Paula lay buried under 20 feet (6 m) of mud and debris; other parts of Ventura County were covered up to 70 feet (21 m). Disaster recovery crews worked for days, and the final death count has been estimated at 450, including 42 school children. Mulholland resigned, took full responsibility for the worst US civil engineering disaster of the 20th century, and during the subsequent investigation said, "the only people I envy in this thing are the dead." Though the inquest placed responsibility for the disaster on improper engineering, design, and governmental inspection, it also recommended that Mulholland not be held responsible because he had no way of knowing that the dam's site contained unstable rock formations (which were ultimately determined to be the cause of failure).