The Miocene Tagay section in the north-western part of Olkhon Island, Lake Baikal, provides a unique window into past life in northern Asia. To aid palaeoenvironmental reconstructions, we carried out whole-rock geochemical analyses of 17 sedimentary layers of this section. The aim of this geochemical approach is to examine the element variations as a response to climate change during formation of the Tagay section deposits with a focus on the hydrological regime of the catchment and in-lake processes. Our results establish that temperature and climate conditions during the formation of sediments of section Tagay-1 were fairly stable, no abrupt climatic changes occurred. The palaeoclimate was temperate, however, it had a cyclic nature: wet and semiarid epochs of different intensity and duration alternated. The basal part of the sediment sequence is dominated by terrigeneous material, mainly by surface runoff, so the sedimentation was fed by erosion products of the weathering crust. During sedimentation of this lower part (layers 17–9), the palaeo-lake level and salinity stayed practically unchanged. The drawdown of the palaeo-lake and increasing salinity started in the higher middle part (layer 8), and reached the minimum water level and maximum salinity in layers 7–6. Sediments of the layers 8–6 accumulated in an arid climate. After deposition of layer 5, the water level began to rise, and during formation of layer 3 it fell again. The highest sedimentation rate was in layers 12–5, these are also the layers with the highest enrichment of biogenic elements (layers 12, 7–5) and where carbonate deposition took place. The observed changes in element behaviour are related to hydrological changes in the catchment (precipitation), lake level status, and evaporation, and are ultimately driven by climate.