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• A hydrological modeling approach was proposed to distinguish the relative contribution of climate changes and human activities on Daihai Lake's recession. • In the absence of natural runoff and human-induced water withdrawal observations, the natural state's lake water storage changes were reconstructed. • Without considering the high water years, the anthropogenic factor took the responsibility for the lake shrinkage about 58%, while the climatic factor took roughly about 42% in period 1974–2018. • This investigation serves as a useful example of applying a distributed model to the assessment of lake hydrology, especially for the lake catchments with limited observations. In recent decades, water levels in many closed inland lakes over north-western China experienced severe declines, among which the Daihai Lake in Inner Mongolia, China was particularly significant. Remotely sensed investigations indicated that the Daihai Lake had shrunk approximately 64% in an area with the dramatic decline of water level approximately 9 m from the 1980 s to 2010 s, which has caused serious concern on the sustainable development of the surrounding region. Consequently, several previous studies have concentrated on the possible causes of lake shrinkage. However, predicting climate variability and anthropogenic activities' relative contributions to lake water decline is challenging due to the lack of direct water consumption upstream and watershed-scale natural runoff observations. In this paper, a hydrological modeling approach was presented to quantitatively evaluate and separate the relative contributions of climate variations and intensifying anthropogenic activities. The simulation accuracy was evaluated through comparisons with observed data and cross-validation with previous studies. Based on a baseline period, the natural streamflow draining into the lake was reconstructed using the model. The results revealed that the water loss of the Daihai Lake was caused predominately by human activities rather than climate variability. Specifically, for wet conditions, the climate factors posed a negative effect on the water level decline of the lake and delayed the shrinking process of the lake area. The anthropogenic factors took a dominant role (roughly 58%) of lake shrinkage at the annual average scale for normal and dry conditions, while the climate factors accounted for approximately 42%. Hence, the rational policy for water resource management, ecological restoration, and dam and reservoir constructions/operations should be the essential precautions for sustainable development of the Daihai Lake and its surroundings. Additionally, the hydrological modeling approach adopted in this investigation serves as a useful example of the quantitative assessment of climate variations and human activities, especially for the ungauged catchments. [ABSTRACT FROM AUTHOR]