The MBT/CBT palaeotemperature proxy uses the distribution of branched glycerol dialkyl glycerol tetraethers (brGDGTs), membrane lipids that are supposed to derive from soil bacteria, to reconstruct mean annual air temperature (MAAT). Applied successfully in coastal marine sediments, its extension to lake-sediment records with potentially high time resolution would greatly expand its utility. Over the last years, however, studies have indicated the presence of additional sources of brGDGTs within lake systems. To constrain the factors influencing the MBT/CBT palaeotemperature proxy in lakes, detailed investigation of brGDGT fluxes in a modern lake system is necessary to identify their potential sources. This study concentrates on Lake Challa, a permanently stratified crater lake in equatorial East Africa with limited catchment area. An almost 3-year time series of approximately monthly samples of settling particles, supplemented with a depth profile of suspended particulate matter (SPM) and sets of profundal surface-sediment and catchment soil samples, were analysed for both the ‘living’ intact polar lipids (IPLs) and ‘fossil’ core lipids (CLs) of GDGTs. We found that brGDGTs are produced in oxic, suboxic and anoxic zones of the water column, and in substantial amounts compared to influxes from catchment soils. Additional in situ production within the lake sediments is most probable, but cannot be definitely confirmed at this time. These lacustrine brGDGTs display a different response to temperature variation than soil-derived brGDGTs, signifying either a different physiological adaptation to changing conditions within the water column and/or a different composition of the respective bacterial communities. Using this specific relationship with temperature, a local calibration based on brGDGT distributions in SPM generates relatively accurate water temperature estimates from settling particles but fails for surface sediments.