New findings of paleoenvironmental change in Lake Winnipeg, southern Manitoba, reveal evidence of unexpectedly dry conditions from 7.5 to 4 ka (7500 to 4000 radiocarbon years before present), with reduced lake area in the north and a desiccated lake basin in the south. Changes in extent of this large lake, now ∼400 km long, can be explained by a combination of (1) expansion due to postglacial differential uplift (tilting), and (2) lake-area reduction due to drier climates associated with the former presence of dry-grassland vegetation. Comparing lake areas sustainable by grassland climate with computed potential lake areas based on the assumption of open (overflowing) conditions, we quantify the atmospheric moisture reduction represented by the middle Holocene dry conditions. This approach holds promise for calibrating regional models of climate change and exploring the effects of dry paleoclimates in other large lake basins such as the Laurentian Great Lakes. The ongoing postglacial tilting is of societal concern because it contributes to long-term lakeshore erosion and to the decrease in discharge capacity of the inflowing flood-prone Red River in a populated region.