Evidence for a long-lived, high-elevation plateau contradicts the hypothesis that uplift of the southern Tibetan Plateau was a driver of late Miocene–Pliocene changes in ecology and monsoon strength. We illuminate the mechanisms underlying late Miocene–Pliocene environmental changes using a multi-proxy record from the Zhada Basin, southwestern Tibetan Plateau, between ca. 9.2 and 2.3 Ma. An increase in mean carbonate δ18Oc and δ13Cc values, decrease in grain size, and onset of lacustrine deposition at 6.0 Ma is attributed to local tectonic damming and transition from a through-flowing fluvial system to a terminal lake. This is followed at 3.5 Ma by a decrease in lake size indicated by synchronous increase in grain size, progradation of lake-margin depositional systems, increase in δ18Oc values at lake-central locations, and divergence in δ18Oc values between inflowing and lake water. We attribute lake shrinking to decreasing Indian summer monsoon precipitation due to the combined effects of decreased southern Tibetan Plateau elevations and cooler Indian Ocean temperatures. We attribute increased grain size and δ18Oc value variability to changes in fluvial discharge due to increased sensitivity to orbital forcing, itself possibly coupled with onset of glacial conditions at high elevations. These mechanisms link regional tectonic events to Pliocene changes in climate and environmental conditions, including erosion, granularity, sediment accumulation rates, and potentially biological turnover on and around the Tibetan Plateau.