An energy flux balance model has been developed which treats evaporation as a function of air temperature, surface water temperature, precipitable water aloft, the amount, height, and type of sky cover, and the optical air mass. The model has been used to estimate the mean historical evaporation rate for Pyramid Lake, Nevada, using as input climatic data from the Reno area averaged over the period 1950–1975. Estimated and measured values of the mean annual evaporation rate were found to be in good agreement. The model was used to simulate changes in the level, the surface area, and the volume of paleo Lake Lahontan. In particular, possible climatic states responsible for past high stands (1270 and 1330 m) were investigated. A conservative range of discharge values was used in the calculations. Results of the simulations indicate the fundamental importance of sky cover in the creation and destruction of large lake systems.