Herein, we present a synthetic study combining iron (Fe) speciation and biomarkers in sediment samples from Luguhu Lake to investigate their relationship and the environmental significance thereof. Mössbauer spectroscopy and gas chromatography–mass spectrometry were used for these measurements. The results suggest that (a) there is a strong negative correlation between Fe2+/Fe3+ and the ratio of pristane to phytane (Pr/Ph), indicating that both Fe2+/Fe3+ and Pr/Ph effectively present the inorganic and organic aspects, respectively, of the oxidation–deoxidation environment in Luguhu Lake; (b) palaeotemperature may be a factor, in addition to the redox conditions, that affects the Fe2+/Fe3+ ratio, and it might play a favourable role in studies of palaeotemperature; and (c) the relative abundance of Fe in Luguhu Lake is affected by the palaeoclimate and the environment in which the palaeosediment was deposited. The mechanism of change in the total area (the total absorption area of Mössbauer spectrum) with the palaeoenvironment seems to be explained by the loss of Fe, which occurs as the water drains out of the lake, and the increase in Fe loss from the sediment as rainfall levels increase.