Chironomid, pollen, and rhizopod records from a permafrost sequence at the Bolshoy Lyakhovsky Island (New Siberian Archipelago) document the evolution of a thermokarst palaeo-lake and environmental conditions in the region during the Last Interglacial (MIS 5e, ca. 130120 ka). Open Poaceae and Artemisia associations dominated vegetation at the beginning of the interglacial period, ca. 130 ka. Rare shrub thickets (Salix, Betula nana, Alnus fruticosa) grew in more protected and wetter places as well. Saalian ice wedges started to melt during this time, resulting in the formation of an initial thermokarst water body. The high percentage of semi-aquatic chironomids suggests that a peatland-pool palaeo-biotope existed at the site, when initial water body started to form. A distinct decrease in semi-aquatic chironomid taxa and an increase in lacustrine ones point to a gradual pooling of water in basin, which could in turn create thaw a permanent pond during the subsequent period. The highest relative abundance of Chironomus and Procladius reflects an existence of unfrozen water remaining under the ice throughout the ice-covered period during the later stage of palaeo-lake development. Chironomid record points to three successive stages during the water body evolution: (1) a peatland pool; (2) a pond (i.e., less deep than the maximum ice-cover thickness); and (3) a shallow lake (i.e., more deep than the maximum ice-cover thickness). The evolutionary trend of palaeo-lake points to intensive thermokarst processes occurring in the region during the Last Interglacial. Shrub tundra communities with Alnus fruticosa, Betula nana dominated the vegetation during the interglacial optimum that is evidenced by pollen record. The climate was relatively moist and warm. The results of this study suggest that quantitative chironomid-based temperature reconstructions from the Arctic thermokarst ponds/lakes may be problematic owing to other key environmental factors, such as prolonged periods of winter anoxia and local hydrological/geomorphological processes, controlling the chironomid assemblages