A high-resolution lacustrine-peat record from the desert-loess transitional zone in Northern China was obtained to reconstruct Holocene environmental change in the region. AMS 14C dates are used to provide a chronology. The results indicate that the site was a desert environment before 12.2 cal kyr BP, and was then occupied by a paleolake which started to shrink, with a wetland occurring from 6.2 to 3.0 cal kyr BP. Subsequently, the site became a seasonally water-filled depression. Based on the lithology and measurements of grain size and total organic carbon content, the climate changed from arid to humid at 12.2 cal kyr BP, and became more humid after 8.3 cal kyr BP. From 6.2 to 3.0 cal kyr BP, precipitation decreased but the climate remained at an optimum. After 3.0 cal kyr BP, the climate was dry overall but with several humid intervals. A comparison of paleoclimatic records from lacustrine and aeolian deposits from the region reveals a discrepancy about the nature of the early Holocene climate, and we conclude that this is because lacustrine sediments responded more sensitively to precipitation than aeolian deposits when the temperature was low. The environmental evolution of the region was synchronous with changes in the Asian summer monsoon (ASM), but temperature also played a key role in the early Holocene.