We present a 2000-year high-resolution diatom record from Bosten Lake (Yanqi Basin, Xinjiang), which is the largest inland freshwater lake in China. Our aims were to investigate the influence of climate change and human activity on its aquatic ecology during the late Holocene. During AD 280–480, a low water level and high salinity occurred, based on the dominance of epipelic and brackish diatoms. In addition, the diatom stratigraphy, combined with records of mean grain size and carbonate content, suggests that the lake experienced a high level of eolian input from the surrounding dunes. We hypothesize that during this interval, Loulan Kingdom, an important city of the Han Dynasty, located downstream of Bosten Lake, was abandoned due to the increasing scarcity of water resources and related harsh environmental conditions, including stronger eolian activity, which were the consequences of climate change. The dominance of meso-eutrophic small fragilarioid diatoms coincides with warm and arid intervals which also correspond to intensified human activity. These intervals correspond to the development of the Tang Dynasty (from ~AD 600), the ‘Medieval Warm Period’ (AD 1000–1200), and the last ~200 years. A shift from meso-eutrophic/benthic diatoms to oligotrophic/planktonic diatoms occurred during an interval of enhanced precipitation throughout the humid ‘Little Ice Age’ (AD 1600–1800). A return to markedly eutrophic conditions and a decreasing lake level occurred after the ‘Little Ice Age’, reflecting the more arid regional environment of the last 200 years. The high variability of the proxies suggests that both climate change and human activity were the major drivers of the ecological status of Bosten Lake during the late Holocene. We suggest that both the continuous increase of human activity and ongoing global warming will cause the major eutrophication or salinization of the freshwater lakes in the arid zone of northwest China.