This study presents a series of paleoenvironmental results from a radiocarbon-dated 154-cm-long lacustrine sedimentary sequence from Qrdin Nuur (115°51′20″E, 42°36′20.06″N; elevation 1290 asl), in southern Inner Mongolia, China. Measurements of grain size, magnetic susceptibility (MS), total nitrogen (TN), total organic carbon (TOC), total inorganic carbon (TIC), atomic TOC/TN (C/N) and carbonate content were conducted in order to reconstruct the climate since ∼3700 cal a BP. In addition to a regional drying trend in the late Holocene, closely related to the weakening of the East Asian Summer Monsoon (EASM), four distinct climatic stages can be identified. (i) From 3700 to 2909 cal a BP, a semi-arid and cool climate dominated the lake area, with a transitory climatic amelioration from 3300 to 3150 cal a BP. (ii) The interval from 2909 to 2589 cal a BP was characterized by a rising temperature and the recovery from drought. (iii) From 2589 to 1903 cal a BP, drought conditions were renewed and significantly intensified in a cold environment. (iv) After 1903 cal a BP, a warm climate with severe evaporation accelerated the shrinking of Qrdin Nuur. A comparison of our results with other paleoclimatic records, mainly from southern Inner Mongolia, reveals similar climatic trends and highlights the asynchronous nature of the regional climatic transition to increased aridity, which was reflected by the activation of the Otindag sandy land and by the dominance of steppe landscapes. Several multi-centennial temperature oscillations are recognized over the last two millennia, as inferred from fluctuations in TIC and carbonate content. We correlate the warm interval from 853 to 560 cal a BP (1097–1390 AD) with the Medieval Warm Period (MWP), and the consequent cold interval from 560 to 128 cal a BP (1390–1822 AD) with the Little Ice Age (LIA). Furthermore, the climatic reconstruction shows that the lake area was generally drier during the LIA than in the MWP.