In eastern Africa, there are few long, high-quality records of environmental change at high altitudes, inhibiting a broader understanding of regional climate change. We investigated a Holocene lacustrine sediment archive from Lake Garba Guracha, Bale Mountains, Ethiopia, (3,950 m asl), and reconstructed high-altitude lake evaporation history using δ18O records derived from the analysis of compound-specific sugar biomarkers and diatoms. The δ18Odiatom and δ18Ofuc records are clearly correlated and reveal similar ranges (7.9‰ and 7.1‰, respectively). The lowest δ18O values occurred between 10–7 cal ka BP and were followed by a continuous shift towards more positive δ18O values. Due to the aquatic origin of the sugar biomarker and similar trends of δ18Odiatom, we suggest that our lacustrine δ18Ofuc record reflects δ18Olake water. Therefore, without completely excluding the influence of the ‘amount-effect’ and the ‘source-effect’, we interpret our record to reflect primarily the precipitation-to-evaporation ratio (P/E). We conclude that precipitation increased at the beginning of the Holocene, leading to an overflowing lake between ca. 10 and ca. 8 cal ka BP, indicated by low δ18Olake water values, which are interpreted as reduced evaporative enrichment. This is followed by a continuous trend towards drier conditions, indicating at least a seasonally closed lake system.