The interactions of the different monsoon systems across Southeast Asia create extreme climate phenomena. Central Vietnam, located near the centre of this transitional region, has encountered numerous effects. As a result, its sediments from lakes or speleothems are valuable archives for interpreting past climate variability. However, there is still a lack of high-resolution paleoenvironmental and palaeoclimatic reconstructions during the Holocene in Vietnam. Our study presents a paleoenvironmental diatom-based record of sediment cores collected from Biển Hồ maar lake (14°03′N, 108°00′E) in the Central Highlands of Vietnam covering nearly the entire Holocene. Based on changes in diatom assemblages in the sediment sequence, we identified two periods of the Early Holocene (~11,700–7800 cal BP) and the Mid- to Late-Holocene (~7800–360 cal BP), which mark a remarkable shift in the environment around Biển Hồ. Alternations of key diatom species during the Early Holocene indicate intensity variations between water-mixing and thermal stratification mechanisms in meso-eutrophic conditions. During the Mid- to Late-Holocene, the complete dominance of Aulacoseira granulata var. granulata implies year-round destratification and intense mixing of the lake water column in a permanently eutrophic environment. Its morphological variability reveals intervals of dry environmental conditions driven by pronounced droughts across the Asian continent.