Under fundamental ecosystem changes in high latitude lakes, a functional paleolimnological approach may increase holistic understanding of lake responses and resilience to climate warming. A ~2000-year sediment record from Lake Loažžejávri in the tundra of northern Finnish Lapland was examined for fossil Cladocera assemblages to examine long-term environmental controls on aquatic communities. In addition, cladoceran functional attributes, including functional diversity (FD), UV absorbance (ABSUV) of Alona carapaces, and sexual reproduction (ephippia) in Bosmina and Chydoridae were analyzed. Cladoceran communities responded to a major change in benthic habitat quality, reflected as elevated (increasingly benthic) sediment organic matter δ13C signal since the 17th century. FD fluctuations showed association with climate oscillation, FD being generally higher during warm climate periods. These ecological changes were likely attributable to diversification of littoral-benthic consumer habitat space. ABSUV, irrespective of increases during the Little Ice Age (LIA) due to higher UV transparency of lake water, was lower under increasing autochthony (benthic production) suggesting establishment of physical UV refugia by the benthic vegetative substrata. Bosmina ephippia exhibited a decreasing trend associated with increasing benthic production, indicating favorable environmental regime, and, together with chydorid ephippia, transient increases during the climate cooling of the LIA driven by shorter open-water season.