Algal communities act as sensitive indicators of past and present climate effects on northern lakes, but their responses can vary considerably between ecosystems. Functional trait-based approaches may help us better understand the nature of the diverse biotic responses and their underlying ecosystem changes. We explored patterns in diatom (Bacillariophyceae) growth forms and species composition during the Neoglacial in two shallow lakes typical of subarctic regions, including a dark-colored woodland lake and a clear tundra lake. Sediment carbon and nitrogen elemental and isotope biogeochemistry and spectral indices were used to track broadscale changes in lake productivity, the inflow of organic carbon from land, and benthic substratum over the past three millennia. The biogeochemical indices tracked declines in land-lake connectivity as well as lake-water and sediment organic enrichment above and below the subarctic treeline driven by Neoglacial cooling. This broadscale environmental transition was intercepted by periods of elevated primary production associated with transient Neoglacial warm anomalies and, in particular, the twentieth century warming. Although the Neoglacial development of the lakes showed conspicuous similarities, diatom functional and taxonomic responses were not uniform between the lakes pointing to intrinsic differences in the development of benthic habitats and underwater-light regimes. Many of the observed biotic shifts aligned with expectations based on earlier research linking diatom functional traits to changing light and organic levels but the results also point to further research needs, particularly to better differentiate the individual and interactive effects of substratum and light. Despite distinct anthropogenic imprints in the biogeochemical record, the scale of human impact on the lakes’ biota has not, as yet, been profound, but the changes are nonetheless clear when compared to the previous three millennia of natural lake development.