This study investigates the late Quaternary development of the sedimentary system of Orog Nuur Basin in southern Mongolia. Geomorphological archives (lacustrine sediments and beach ridges, alluvial fans, aeolian deposits, peat) recorded palaeoenvironmental change from marine isotope stage (MIS) 7 to the late Holocene. Synthesizing the variety of archives allows a better understanding of geomorphological interactions in arid regions and palaeoenvironmental implications for the area. By performing palaeoshoreline mapping and dating, we identified eight palaeolake levels resulting in a refined lake level history of Orog Nuur. The highest reliably dated shoreline is about 56 m higher than today's lake level and provides evidence for a late MIS 5 lake level between 100 and 75 thousand years (ka). Reconstructions yield a minimum volume estimate of 24.5 km3, delineating a lake that is 153 times larger than that of today (0.16 km3). Massive lake extensions occurred also during MIS 3 and the Holocene. The geomorphological investigation reveals late MIS 5 and MIS 3 lake expansions were of similar magnitude. The palaeoenvironmental reconstruction from early Holocene archives indicates that lake expansion was caused by an increase in precipitation and meltwater inflow from the surrounding mountain systems. Afterwards, lake levels declined with some intermittent highstands during the mid‐Holocene (7–5 ka), indicating a general trend towards a lower water inflow throughout the Holocene. Palynological reconstructions of the alpine vegetation development reveal that mid‐Holocene highstands (c. 6.5 ka and 5.5 ka) were fed by higher precipitation in the nearby Gurvan Bogd range. Mountain silts, basin silty sands, and Holocene dune deposits provide further evidence for paleoenvironmental change. As controlling factors of the sedimentary system, we identified changes in effective moisture, higher precipitation values and the contribution of meltwater. Orog Nuur Basin archives are valuable for landscape and palaeoenvironmental reconstructions and for comparisons in supraregional reconstruction approaches.