Sustainable development of hydropower demands a holistic view of potential impacts of water level regulation (WLR) on reservoir ecosystems. Most environmental studies of hydropower have focused on rivers, whereas environmental effects of hydropower operations on reservoirs are less well understood. Here, we synthesize knowledge on how WLR from hydropower affects alpine lake ecosystems and highlight the fundamental factors that shape the environmental impacts of WLR. Our analysis of these impacts ranges from abiotic conditions to lower trophic levels and ultimately to fish. We conclude that the environmental effects are complex and case-specific and thus considering the operational regime of WLR (i.e., amplitude, timing, frequency, and rate of change) as well as the reservoir's morphometry, geology and biotic community are prerequisites for any reliable predictions. Finally, we indicate promising avenues for future research and argue that recording and sharing of data, views and demands among different stakeholders, including operators, researchers and the public, is necessary for the sustainable development of hydropower in alpine lakes.