Despite significant climate change on the Tibetan Plateau, the historical succession trend and underlying driving mechanism of aquatic ecosystem in alpine lake remain unclear. In this study, palaeolimnological analysis and high-throughput sequencing of sedimentary DNA were used to investigate environmental changes, primary productivity, and eukaryotic algal community succession over the past millennium in Lake Yamzhog Yumco of the southern Tibetan Plateau. Lake primary productivity significantly increased after ~1850 CE and algal community succession occurred in three stages including the Medieval Warm Periods (approximately 1000–1250 CE), the Little Ice Age (1250–1850 CE), and the Current Warm Period (1850–2020 CE). Moreover, succession was synchronous with inferred climate changes. Partial least square path modeling indicated that climate factors affected primary productivity and eukaryotic algal community structure by affecting nutrient loading. The results suggest that glacier melting and permafrost degradation caused by climate warming, combined with increased precipitation, may be the major driving factors of nutrient concentration increases, phytoplankton biomass increases, and shifts in community composition. Considering the expected trends of future climate change and continuous warming, the restoration of vegetation cover and reduction of non-point source nutrient loading in the Tibetan Plateau is urgently needed to mitigate climate change impacts on alpine lake aquatic ecosystems.