We report pollen, charcoal and diatom records from the upper 4 m of a core from Inle Lake, Myanmar, spanning the entire Holocene, to investigate the changing palaeoenvironments in which early agriculture developed. From 12,000 to 10,500 cal yr BP a grass swamp existed until it was flooded by rising lake levels, indicated by the onset of marl deposition at the site. The onset of higher lake levels coincided with a transition from conifer-rich forest to mixed deciduous-evergreen forest, and a reduction in local biomass burning. Lake levels remained high until 6400 cal yr BP, thereafter fluctuating with possible dry phases at 4050, 2400 and 1100 cal yr BP. Increased burning is apparent from 2200 cal yr BP inferred to represent the onset of human forest clearance to its very reduced state today. The Inle Lake record compares with Holocene sequences in China, Thailand and India and marine cores south of Myanmar, which similarly show a regional pattern of drier conditions in the early Greenlandian stage, followed by maximum lake levels in the early Northgrippian stage. Fluctuating lake levels are evident in the later Northgrippian and Meghalayan stages after 6000 cal yr BP. This pattern coincides with precessional reduction in summer insolation in the region, which weakens the Asian Monsoon. The present-day bare catchments of Inle Lake probably mostly resulted from forest destruction over the last 2000 years although hints of human presence can be inferred throughout the older record.