Reconstructing the Mid-Holocene climate change in arid and semiarid areas can help predict regional moisture availability and resultant lake evolution and vegetation changes due to future warming. Here, we present a sediment core (YLH15A) from Moon Lake in the Tengger Desert, arid and semiarid China. Based on robust accelerator mass spectrometry 14C dating and multiproxy analyses (pollen, grain size, elements, and total organic carbon), we reconstructed regional climate changes since 7.6 cal ka BP. The climate was generally dry from 7.6 to 2.8 cal ka BP, as indicated by the dried-up lake, strong aeolian activities, and no vegetation, except for a short-term wet interval between 5.4 and 4.9 cal ka BP. The generally dry climate shifted after 2.8 cal ka BP, which is suggested by expanded steppe desert/steppe and increased vegetation cover; it was also accompanied by lake development, which was likely related to increased groundwater recharge originating from regional precipitation and temporary floods from adjacent mountain areas. Our results reveal a prolonged dry Mid-Holocene and relatively wet Late Holocene that are basically consistent with climatic records from the central–east Asian arid and hyperarid areas. The prolonged dry climate in the arid and hyperarid areas is likely to be related to high evaporation triggered by high temperatures during the Middle Holocene.