Long-term fishing bans have spurred extensive debate regarding their impacts on ecosystem structures, functions, and water qualities. However, data on the effects of specific changes induced by fishing bans on ecosystem structures, functions, and water qualities in lakes are still lacking. Therefore, the present study addresses this knowledge gap by employing an Ecopath model to assess alterations in an ecosystem’s structure and function before (2011) and after (2021) the implementation of the fishing ban in Caohai Lake and its association with changes in water quality. (1) We observed a substantial reduction in the area covered by submerged aquatic vegetation after the ban, amounting to a 65% decrease in coverage compared with that before the ban, and a 60% reduction in the total ecosystem’s biomass. (2) Following the ban, the number of fish species increased from 7 to 14, and this was accompanied by a rise in the fish biomass from 14.16 t·km−2 to 25.81 t·km−2; a 4.5-fold increase in the total system consumption was observed, signifying accelerated energy and material flows within the ecosystem. (3) The fishing ban exhibited no significant impact on the total nitrogen concentration; however, it significantly reduced the water’s transparency and increased the total phosphorus, ammonia nitrogen, chemical oxygen demand, and chlorophyll contents (p < 0.05). This shift in nutrient dynamics fostered a transformation from a macrophyte-dominant lake to an alga-dominant lake. The fish abundance and diversity increase in closed-type macrophytic lakes, thereby accelerating energy and material flows within food webs. These findings present novel insights into the effective policy management of fishing bans within the Yangtze River Basin, thus enhancing our understanding of sustainable lake ecosystem management.