Warming-induced ecological degradation and the continuous shrinking of lakes have been observed in the Bashang Plateau, northern China, leading to the recent demise of cultivated forests. The objective of this paper is to investigate the long-term palaeoenvironmental context of these recent changes through a multi-proxy sediment core analysis at Moon Lake to better understand forest sustainability in the future. The core chronology was determined based on seven accelerator mass spectrometry (AMS) 14C dates and covers the period from 14,000 yr BP to the present. The Moon Lake record reveals four climate stages: (1) a warm and humid period followed by a cold and arid phase corresponding to the Allerod warm period and the Younger Dryas stadial (14,000 to 11,700 yr BP), (2) a relatively warm and humid period (11,700 to 7400 yr BP), (3) a period of fluctuating dry-wet-dry changes (7400 to 4000 yr BP), and (4) a relatively arid period (4000 yr BP to present). Since 1800 yr BP, drought conditions have intensified, and significant warming and drying trends have been observed over the past 500 yr BP. This consistent warming and drying trend over the past few centuries indicate that large-scale afforestation is no longer sustainable in the Bashang region. Coupled with instrumental records of soil drying and water scarcity, our Holocene records of climate change are useful for ecological resource management and sustainable forestry planning in the region.