The initial aridification of mid-latitude Asia is thought to be one of the most prominent Cenozoic environmental changes in Asia. However, precisely dated, fine-grained sediments documenting initial aridity beyond central Asia are extremely rare. Here, we reconstruct the history of Middle-Late Eocene (47.8–37.8 Ma) hydroclimate change in northeast China using continuous palynological records from a lacustrine sedimentary sequence in the Fushun Basin. Our results indicate that the onset of aridification occurred concurrently with increased climatic variability at 41.2 Ma, as expressed by a sharp increase in xerophytic Ephedra and mountainous coniferous forest at the expense of an abrupt decrease in broadleaved forest, along with frequent alternations between semi-desert and swamp forest vegetation after 41.2 Ma. The climate changed markedly from a stable, warm-wet climate during the Middle Eocene to a cooler, drier climate with pronounced warm-dry and cold-wet oscillations during the Late Eocene. This finding challenges the previously prevailing idea that the East Asian monsoon was significantly enhanced in northeast China after 41–40 Ma. A comprehensive comparison of records from eastern and central Asia demonstrates that the onset of aridification and enhanced climate variability after 41 Ma were widespread across mid-latitude Asia. This may be explained by reduced moisture transport by the westerlies and strengthening of high- and low-latitude forcing linked to the coeval retreat of the proto-Paratethys Sea.