Modern lake hydrodynamics, ostracode species autecology, stable isotopes (δ18O and δ13C) of multiple ostracode species, ostracode taphonomy and sediment geochemistry were studied to improve interpretation of the late Pleistocene–early Holocene (∼24–10 ka) stable isotope record of ostracodes in sediment core PI-6 from Lago Petén Itzá, northern Guatemala. Oxygen and carbon stable isotopes in modern and fossil species assemblages of Lago Petén Itzá were used as indicators of changes in the balance between evaporation and precipitation, past lake level and carbon source. Ostracode taphonomy was used to detect past periods of strong currents, high-energy environments, and possible partial or full mixing of the lake. The modern lake water isotopic composition displays clear seasonal differences that are independent of lake level fluctuations. Modern benthic species displayed lower δ18O and δ13C values than nektobenthic species, with differences of 3.0‰ and 5.3‰, respectively. Valves of nektobenthic species display higher values of δ13C because these ostracodes live in shallower environments among abundant algae and aquatic plants, where productivity is high. The benthic species Limnocythere opesta Brehm, 1939 displayed the smallest average offset from δ18O water (+0.3‰) and the largest offset from δ13CDIC values (−4.1‰) among studied ostracode species. Nektobenthic species Heterocypris punctata Keyser, 1975 displayed the smallest difference relative to the δ13CDIC values (−0.1‰).Late Pleistocene–early Holocene climate conditions and water levels in Lago Petén Itzá can be summarized as follows: 1) high lake levels and cold conditions (Last Glacial Maximum [LGM], ∼24–19 ka), 2) fluctuating lake levels and cold conditions (Heinrich Stadial 1 [HS1], ∼19–15 ka), 3) high lake levels and warm and wetter conditions (Bølling-Allerød [BA], ∼15–13 ka), 4) low lake levels and dry conditions (Younger Dryas [YD], ∼13–11.5 ka) and 5) high lake levels and warm and wetter conditions (early Holocene, ∼11.5–10.0 ka). Average lake level fluctuation in Lago Petén Itzá during the late Pleistocene–early Holocene was as much as ∼25 m. Ostracode analyses suggest that the LGM was characterized by relatively low δ18O (+4.7 to +6.0‰), and δ13C values (−7.1 to −6.4‰) in ostracode valves, high inferred water depths and high percentages of broken adult and juvenile valves (>66%), suggesting a high-energy environment, strong currents, partial to full mixing, downslope transport, colder water temperatures and wetter conditions. An increase in the relative abundance of the benthic species L. opesta and higher numbers of broken valves suggest heavy precipitation events during the LGM (∼23.7, 21.7, 20.8 and 20.1 ka). HS1 was predominantly dry, but we identified times when lake levels were slightly higher, at the onset of the deglacial and a brief period (∼17–16 ka) between HS1b and HS1a. All studied climate proxies indicate wetter and warmer conditions and lake system stability during the BA. Lake levels dropped during the YD and gradually increased during the Preboreal and early Holocene. We demonstrate that modern and fossil ostracode isotopic signatures, species assemblages and taphonomy can be used together with physical and geochemical variables in Lago Petén Itzá sediments to make high-resolution inferences about late Pleistocene–early Holocene environmental changes in the lowland Neotropics.