Climate drying could have transformed ecosystems in southern Madagascar during recent millennia by contributing to the extinction of endemic megafauna. However, the extent of regional aridification during the past 2000 years is poorly known, as are the responses of endemic animals and economically important livestock to drying. We inferred ~1600 years of climate change around Lake Ranobe, SW Madagascar, using oxygen isotope analyses of monospecific freshwater ostracods (Bradleystrandesia cf. fuscata) and elemental analyses of lake core sediment. We inferred past changes in habitat and diet of introduced and extinct endemic megaherbivores using bone collagen stable isotope and 14C datasets (n = 63). Extinct pygmy hippos and multiple giant lemur species disappeared from the vicinity of Ranobe during a dry interval ~1000–700 cal yr BP, but the simultaneous appearance of introduced cattle, high charcoal concentrations, and other evidence of human activity confound inference of drought-driven extirpations. Unlike the endemic megafauna, relatively low collagen stable nitrogen isotope values among cattle suggest they survived dry intervals by exploiting patches of wet habitat. Although megafaunal extirpations coincided with drought in SW Madagascar, coupled data from bone and lake sediments do not support the hypothesis that extinct megafauna populations collapsed solely because of drought. Given that the reliance of livestock on mesic patches will become more important in the face of projected climate drying, we argue that sustainable conservation of spiny forests in SW Madagascar should support local livelihoods by ensuring that zebu have access to mesic habitat. Additionally, the current interactions between pastoralism and riparian habitats should be studied to help conserve the island’s biodiversity.