Detailed knowledge of wave climate change is essential for understanding coastal geomorphological processes, ecosystem resilience, the design of offshore and coastal engineering structures and aquaculture systems. In Lake Michigan, the in-situ wave observations suitable for long-term analysis are limited to two offshore MetOcean buoys. Since this distribution is inadequate to fully represent spatial patterns of wave climate across the lake, a series of high-resolution SWAN model simulations were performed for the analysis of long-term wave climate change for the entirety of Lake Michigan from 1979 to 2020. Model results were validated against observations from two offshore buoys and 16 coastal buoys. Linear regression analysis of significant wave height (Hs) (mean, 90th percentile, and 99th percentile) across the entire lake using this 42-year simulation suggests that there is no simple linear trend of long-term changes of Hs for the majority (>90%) of the lake. To address the inadequacy of linear trend analysis used in previous studies, a 10-year trailing moving mean was applied to the Hs statistics to remove seasonal and annual variability, focusing on identifying long-term wave climate change. Model results reveal the regime shifts of Hs that correspond to long-term lake water level changes. Specifically, downward trends of Hs were found in the decade of 1990–2000; low Hs during 2000–2010 coincident with low lake levels; and upward trends of Hs were found during 2010–2020 along with rising water levels. The coherent pattern between the wave climate and the water level was hypothesized to result from changing storm frequency and intensity crossing the lake basin, which influences both waves (instantly through increased wind stress on the surface) and water levels (following, with a lag through precipitation and runoff). Hence, recent water level increases and wave growth were likely associated with increased storminess observed in the Great Lakes. With regional warming, the decrease in ice cover in Lake Michigan (particularly in the northernmost region of the lake) favored the wave growth in the winter due to increased surface wind stress, wind fetch, and wave transmission. Model simulations suggest that the basin-wide Hs can increase significantly during the winter season with projected regional warming and associated decreases in winter ice cover. The recent increases in wave height and water level, along with warming climate and ice reduction, may yield increasing coastal damages such as accelerating coastal erosion.