A high-resolution, well-dated dinoflagellate cyst record from a lagoon of the southeastern Swedish Baltic Sea reveals climate and hydrological changes during the Holocene. Marine dinoflagellate cysts occurred initially at about 8600 cal yr BP, indicating the onset of the Littorina transgression in the southeastern Swedish lowland associated with global sea level rise, and thus the opening of the Danish straits. Both the species diversity and the total accumulation rates of dinoflagellate cysts continued to increase by 7000 cal yr BP and then decreased progressively. This pattern reveals the first-order change in local sea level as a function of ice-volume-equivalent sea level rise versus isostatic land uplift. Superimposed upon this local sea level trend, well-defined fluctuations of the total accumulation rates of dinoflagellate cysts occurred on quasi-1000- and 500-yr frequency bands particularly between 7500 and 4000 cal yr BP, when the connection between the Baltic basin and the North Atlantic was broader. A close correlation of the total accumulation rates of dinoflagellate cysts with GISP2 ice core sea-salt ions suggests that fluctuations of Baltic surface conditions during the middle Holocene might have been regulated by quasi-periodic variations of the prevailing southwesterly winds, most likely through a system similar to the dipole oscillation of the modern North Atlantic atmosphere.