A sound knowledge of paleovegetation is fundamental to better understanding of past climate variability, and provides necessary background for improving predictions of future climate changes. In the present study, stable isotopes (δ¹³C and δ¹⁵N) and lignin biomarker of sedimentary organic matter (SOM) from Lake Erhai (25°50′ N; 100°10′ E, Southwest China) were determined to reconstruct paleovegetation and to find vegetation–climate relationships. The stable carbon isotope signatures suggested that the organic matter mostly derived from C3 plants throughout the depositional periods since 18.5kaBP. The variability of isotopic values of carbon (δ¹³C: −28.8 to −23.9‰) and nitrogen (δ¹⁵N: 1.2–4.1‰) might be related to changes in terrestrial runoff (i.e., precipitation). Compositions of the alkaline CuO-oxidation products of lignin showed a significant change in terrestrial vegetation from gymnosperm-rich to angiosperm-rich plants at lake catchments in the early-Holocene. The lignin phenol vegetation index (LPVI) also indicated changes in terrestrial vegetation with few more subtle changes during the last 18.5ka as a single proxy of entire characteristic of terrestrial vegetation. In comparison to past Asian monsoon records (δ¹⁸O record in Stalagmite of Dongge cave), LPVI suggested a direct linkage between vegetation changes and Asian monsoon variability that might be influenced by global climate changes.