Proxy records from lakes on the Tibetan Plateau are commonly used to infer monsoon-related climatic changes during the late Quaternary. Specific influences of catchment processes and their interaction with the lake basin are seldom utilized. Based on morphological field investigations, supported by remote sensing analyses in combination with radiocarbon-dated sediment data from lacustrine sequences along paleoshorelines and terraces, we can demonstrate that close relationships exist between glacier dynamics, fluvial–alluvial fan/terrace formation and lake level and lake area changes of Paiku Co, southern Tibet. Our results show that the formation of large-scale, fluvial–alluvial fans (F1) predates the maximum advance of the Xixiabangma glaciers. The latter formed a distinct terminal moraine complex north of the present glaciers during the local LGM (LLGM) at 42–21calky BP. A younger fan generation (F2) developed from the LLGM to the late Holocene, which was accompanied by lake level fluctuations with a generally decreasing trend. The highest morphologically traceable lake level at 4665masl existed prior to 25calky BP and induced a potential overflow to the neighboring Langqiang Co and Pengqu River. A high level also existed during the LLGM, followed by a minor decline until ca. 15calky BP, owing to reduced meltwater discharge under cold and dry climatic conditions. A return to the previous level during the late-glacial/early Holocene period between 11.9 and 9.5calky BP is likely caused by climate warming, increased meltwater discharge, and enhanced Indian Summer Monsoon (ISM) moisture supply. Afterwards, Paiku Co shrank gradually toward its present level, while the youngest fan (F3) generation evolved as individual small-sized bodies under ephemeral discharge conditions from the mid-Holocene to the present.The formation of four terrace levels (T4-1) is likely the result of sequential incision into the fan generations with a mean erosion rate of 50cm/ky, caused by lake level lowering. Tectonic impact cannot be completely ruled out. Since 1976, the glaciers lost ca. 15% in area, accompanied by lake area loss of ~3.7% between 1972 and June 2014. Seasonal lake level variations of about 1–2m in height occur in response to summer monsoon rainfall.Our data show a close interaction between glacial dynamics, fluvial processes, terrace formation, and water budget changes throughout the last 25calky BP in response to the well-known, insolation-driven, ISM-effective moisture supply during the late-glacial and Holocene period. Temperature-driven meltwater dynamics were the controlling factors for variations in water balance of Paiku Co.