Diatom and geochemical elements were used to analyze the transition from lake to peatland in the Colônia basin, São Paulo, Brazil; local versus regional driving factors were examined. Sediment core COL17–1, section 1470–800 cm depth shows five distinct diatom intervals offering insights into environmental changes and ecological characteristics based on sediment sources, diatom productivity, and bog wetness. Colônia basin evolution exhibited a progressive transition from mineral elements, associated with catchment instability during the lake stage, to higher levels of organic-rich sediments towards the uppermost section of the core. This shift was accompanied by the increasing presence of elements reflecting redox/productivity dynamics under changing conditions. Simultaneously, Br concentrations increased during peat formation indicating alterations in organic matter were influenced by atmospheric circulation and precipitation. During the transition from lake to peatland, the paleolake shallowing process showed successive colonization by benthic acidophilus diatom taxa, indicating a broader littoral zone and subsequent disappearance of diatoms under dry conditions. After a benthic stage, the diatom content shifted to one of planktonic dominance characterized by Aulacoseira sp., marking the return to cold-wet conditions and a moderately deep, flooded environment. Subsequently, the basin evolved into a completely flooded, turbulent peatland dominated by the Aulacoseira granulata complex. An uppermost layer sterile in diatom was associated with warmer and drier conditions and decrease in the concentration of mineral elements. Present results compared with core CO14 and Lake Titicaca showed benthic-rich levels during the penultimate glacial period and low benthic abundances. This differed the glacial-interglacial transition from those of COL17–1, which was dominated by planktonic-rich levels, suggesting the need for either a reassessment of our age model or the influence of local factors on diatom content. These findings highlight the sensitivity of diatoms to climate shifts, particularly in tropical regions, across different glacial-interglacial cycles.