AbstractPower law size distribution is found to associate with fractal, self‐organized behaviors and patterns of complex systems. Such distribution also emerges from natural lakes, with potentially important links to the dynamics of lake systems. But the driving mechanism that generates and shapes this feature in lake systems remains unclear. Moreover, the power law itself was found inadequate for fully describing the size distribution of lakes, due to deviations at the two ends of size range. Based on observed and simulated lakes in China's 11 hydro‐climatic zones, we established a conceptual model for lake systems, which covers the whole size range of lake size distribution and reveals the underlying driving mechanism. The full lake size distribution is composed of three components, with three phases featured by exponential, stretched‐exponential and power law distribution. The three phases represent system states with successively increasing degrees of heterogeneity and orderliness, and more importantly, indicate the dominance of exogenic and endogenic forces, respectively. As the dominant driving force changes from endogenic to exogenic, a phase transition occurs with lake size distribution shifted from power law to stretched‐exponential and further to exponential distribution. Apart from compressing the power law phase, exogenic force also increases its scaling exponent, driving the corresponding lake size power spectrum into the regime of “blue noise.” During this process, the autocorrelation function of the lake system diverges with a possibility of going to infinity, indicating the loss of system resilience.