Abstract The succession of sedimentary subfacies in the Medicine Lake basin (South Dakota, USA) documents numerous changes in total dissolved solids (TDS), lake level, and the nature and stability of meromixis during the Holocene. The lake formed about 10.6 ka B.P. when coarse clastics and massive fine-grained muds were deposited in a well-mixed freshwater system. Subsequently the lake became saline and meromictic, depositing a finely laminated unit composed of variegated and gray muds, organic facies, gypsum and aragonite laminae. Phototrophic bacterial plate communities (BPC) at the chemocline were significant producers of pelagic organic matter. Relatively high lake levels (at least 10 m higher than today) but saline and meromictic conditions predominated through the early to mid Holocene. At the end of this phase, lake level dropped and stable meromixis was disrupted. Sands and massive or banded muds were deposited in sublittoral areas and benthic microbial communities (BMC) spread over the lake, replacing BPCs as the predominant microbial producers. When lake level rose again, massive and laminated units were deposited under less saline conditions. Another pronounced episode of low lake level and high salinity followed. The most recent sediments are sapropels, massive or banded muds, and littoral sands. The δ 18O record from authigenic aragonite shows more positive values during the arid mid-Holocene interval, with an abrupt increase at the end of this period, followed by generally more negative values during the cooler and wetter late Holocene. The small range of δ 18O values (3%.) suggests that the lake was well buffered against high-frequency climatic cycles, probably as a result of groundwater modulation. We postulate that meromixis and the type of photosynthetic microbial communities dominating the basinal region of the lake system—either BPCs or BMCs—exerted major controls on the carbon cycle, and consequently, on the development of isotopic trends linking δ 13C and δ 18O values. More negative δ 13C values during the early and mid Holocene are interpreted as a consequence of the predominance of 12C-enriched microbial carbon from BPCs. Examples of both covariant and inverse covariant isotope trends between δ 13C and δ 18O values occur in the Medicine Lake record. Inverse covariant trends characterize long periods of stable meromixis when BPCs predominate over BMCs. We hypothesize that well-developed water stratification caused by greater influx of relatively 18O-depleted freshwater induces higher productivity at the chemocline and, consequently, more positive δ 13C values in the precipitated carbonates. Unstable phases of meromixis or holomictic conditions are characterized by a predominance of BMCs or other biogenic producers over BPCs, and a number of other factors combine to promote covariant trends. The Medicine Lake record is consistent with the paleoclimatic interpretation for the northern Great Plains of a more arid early and middle Holocene followed by an abrupt transition to a relatively cooler and wetter late Holocene. The sedimentary succesion in Medicine Lake documents a much more fluctuating and abrupt climate behavior than suggested by the vegetation paleorecord and suggest a late Holocene climate punctuated by arid episodes.