Laguna Potrok Aike is an exceptional site in the southern hemisphere’s mid-latitudes because it records changes in the hydrological regime through lake-level variations in a continuous, high-resolution sedi- ment record back into the late Pleistocene. In this study, driving forces of lake-level changes at Laguna Potrok Aike are evaluated by means of process studies using data from an extensive multi-year moni- toring in and around the lake. Lake-volume changes were calculated with an energy-budget/bulk- transfer approach and translated into lake-level variations, which were then compared to pressure sensor data. Calculated lake levels are in broad agreement with measured data. We hypothesize that on short time scales, lake-level fluctuations are mainly driven by the precipitation-to-evaporation ratio. Apart from changing catchment conditions, relative humidity, precipitation, temperature, wind strength and wind direction have the most important influence on the hydrological balance of the lake. Lake level decreases during periods of persistently high wind speeds from westerly directions, whereas, during periods with more frequent occurrences of easterly winds, it increases. These situations are linked to a strengthening of the Southern Hemispheric Westerlies in the first and more frequent blocking situa- tions in the latter case. Although lake-level changes at Laguna Potrok Aike show some degree of simi- larity to variations of the El Niño Southern Oscillation (ENSO) and the Southern Hemisphere Annular Mode (SAM), a persistent correspondence remains to be documented. Water chemistry and sediment-trap data suggest that lake-internal carbonate precipitation is highly sensitive to short-term changes in the lake water volume and, thus, to lake-level variations. However, it becomes obvious that the sedimentary carbonate record, representing changes on longer time scales, is not linearly linked to lake-level changes, hence complicating quantitative lake-level reconstructions back in time. We suggest that short-term changes in authigenic carbonate production are mainly driven by changing precipitation/evaporation ratios probably superimposed on longer-term changes in ground- water input that represent a buffered climate signal. Scenario calculations for a period of 60 years show that changes of the controlling meteorological parameters in the range of 15-17% can lead to lake-level changes with a magnitude comparable to the reconstructed Holocene and Lateglacial extreme situations. In addition, modifications in the water- retaining capacity of the lake can also produce large lake-level changes. It is hypothesized that the development or disappearance of permafrost in the catchment of Laguna Potrok Aike during the Last Glacial/Interglacial transition may have changed the water-retaining capacity tremendously. The lake- level reconstructions for Laguna Potrok Aike might express some of the meridional climate variability observed in coupled general circulation model (CGCM) simulations for southern South America for the Last Glacial Maximum (LGM) and the mid Holocene.