The study of the sedimentary record of nonmarine aquatic systems (paleolimnology) provides a tool for reconstructing the history of the basins themselves, as well as the history of the atmospheric and terrestrial systems that influence them. Such records allow us to understand environmental dynamics over periods longer than that of recorded history. Among inland aquatic systems, lakes have been studied more extensively; therefore, this review focuses on insights regarding environmental structure and function gained from studying lake sediments. Studies of the lacustrine paleolimnological record have been used to describe patterns of long‐term climatic variation and the response of lakes to changes in climate and catchment vegetation and soils. Although ecological literature from the early decades of the twentieth century suggested that lakes became enriched over time (eutrophic), eventually filling with sediment and becoming wetlands, it is now clear that there are multiple developmental pathways for lakes. Some lakes indeed become enriched, whereas others show a long‐term decline in nutrient concentrations and pH. Similarly, succession from lake to bog or wetland is not a universal trend. Paleolimnological studies also have been used to reconstruct the recent history of eutrophication, lake acidification, and atmospheric pollution. In these studies, the history archived in lake sediments provides a tool for measuring the magnitude of human impacts on the environment and for evaluating whether twentieth century patterns fall outside the natural range of environmental variation.