Variations in fossil diatom assemblages and their relationship with global and Indian monsoon climate changes for the last 600,000 yr were investigated using a core of ancient lake (Paleo-Kathmandu Lake) sediments drilled at the Kathmandu Basin, Nepal Himalaya. Chronological scales of the core were constructed by tuning pollen wet and dry index records to the SPECMAP δ18O stack record. Examinations of biogenic silica contents and fossil diatom assemblages revealed that variations in productivity and compositions of diatom assemblages were closely linked with global and Indian monsoon climate changes on glacial and interglacial time scales. When summer monsoonal rainfall increased during interglacials (interstadials), diatom productivity increased because of increased inputs of terrestrial nutrients into the lake. When summer monsoonal rainfall reduced and/or winter monsoonal aridification enhanced during glacials (stadials), productivity of the diatoms decreased and lake-level falling brought about changes in compositions of diatom assemblages. Monospecific assemblages by unique Cyclotella kathmanduensis and Puncticulata versiformis appeared during about 590 to 390 ka. This might be attributed to evolutionary fine-tuning of diatom assemblages to specific lake environmental conditions. Additionally, low-amplitude precessional variations in monsoon climate and less lake-level changes may have also allowed both species to dominate over the long periods.