We recovered a sediment core (DL04) from the depocenter of Dali Lake in central-eastern Inner Mongolia. The upper 8.5 m were analyzed at 1-cm intervals for grain-size distribution to partition the grain-size components and provide a high-resolution proxy record of Holocene lake level changes. Partitioning of three to six components, C1, C2, C3 through C6 from fine to coarse modes within the individual polymodal distributions, into overlapping lognormal distributions, was accomplished utilizing the method of lognormal distribution function fitting. Genetic analyses of the grain-size components suggest that two major components, C2 and C3, interpreted as offshore-suspension fine and medium-to-coarse silt, can serve as sediment proxies for past changes in the level of Dali Lake. Lower modal sizes of both C2 and C3 and greater C3 and lower C2 percentages reflect higher lake stands. The proxy data from DL04 core sediments span the last 12,000 years and indicate that Dali Lake experienced five stages during the Holocene. During the interval ca. 11,500–9,800 cal year BP, lake level was unstable, with drastic rises and falls. Following that interval, the lake level was marked by high stands between ca. 9,800 and 7,100 cal year BP. During the period from ca. 7,100 to 3,650 cal year BP, lake level maintained generally low stands, but displayed a slight tendency to rise. Subsequently, the lake level continued rising, but exhibited high-frequency, high-amplitude fluctuations until ca. 1,800 cal years ago. Since ca. 1,800 cal year BP, the lake has displayed a gradual lowering trend with frequent fluctuations.