Modelling, monitoring, and experimental data have shown that global climate change can impact aquatic phytoplankton communities directly, through the effects of warming on primary producers, as well as indirectly through cascading effects from higher trophic levels. Although both concepts are common in modern limnological studies, it remains unclear whether the ‘top-down’ effects from higher trophic levels on phytoplankton exert strong effects in natural systems over long (centennial) timescales. Here, we use multiproxy data including pigments, zooplankton remains, nutrient concentrations, and paleoclimate indicators from a sediment core in Dagze Co, Central Tibet (a two-trophic level lake) to reconstruct algal production, zooplankton community, nutrient and salinity changes. Our results show that top-down effects of higher trophic levels offset effects from warming and nutrient addition on algal growth. Warming enhanced glacial meltwater inflow to the lake, and intensive human activities increased nutrient inputs. Changes in lake salinity and N:P ratios coincided with zooplankton community shifts during the past 600 years, and Daphnia tibetana replaced the brine shrimp, Artemia tibetiana, after the relocation of a town to upstream of the lake in the 1980s led to overharvesting of the brine shrimp. These shifts contributed strongly to changes in algal communities, with changes in zooplankton leading to strong top-down effects that decreased algal production through increasing grazing pressure despite increasing nutrient concentrations. Our results suggest that the typical external drivers (climate and nutrients) of lake ecosystems may be suppressed by internal shifts in plankton communities in lakes.