The impacts of fire and climate on freshwater ecosystems are not well understood, masking the potential impacts of anthropogenic climate change on these systems. A 9200 year Holocene record of sedimentary Carbon/Nitrogen, x-ray fluorescence, charcoal, pollen, and diatoms preserved within a freshwater lake in Tasmania was used to understand the influences of climate variability and fire on aquatic ecosystem response. Western Tasmania is a cool temperate environment where fire occurrence is driven by hydroclimate. High rainfall during the early to mid-Holocene drove an increase in rainforest and peat in the absence of fire, resulting in an oligotrophic and turbid aquatic environment. This also resulted in leaching of humic acid from the catchment, increasing acidity and dystrophy. The onset of a drier, more variable hydroclimate from the mid-to late Holocene drove lower lake levels and a shift to the dominant planktonic diatom species, Discostella stelligera, the result of the unusual bathymetry of Lake Vera where planktonic diatoms increase with lower lake levels. Further drying caused burning of the rainforest (at ca. 2.3 ka) and increased terrigenous deposition into the lake, leading to a productive, alkaline and disturbed diatom community. Repeated fire disturbance resulted in increased inorganic material deposition, the removal of nutrient rich peat, and an invasion of ferns and sclerophyll vegetation. These fire-driven catchment changes caused a shift in the diatom community to low productivity, oligotrophic and acidic assemblages, likely due to restricted light availability and nutrient uptake by increased deposition of terrigenous material. Therefore, the aquatic ecosystem is responding to climate-mediated changes in the terrestrial environment consistent with regional trends in nearby terrestrial-aquatic Holocene records.