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A 2200-yr long, high-resolution (~5 yr) record of drought variability in northwest Montana is inferred from diatoms and δ18O values of bio-induced carbonate preserved in a varved lacustrine core from Foy Lake. A previously developed model of the diatom response to lake-level fluctuations is used to constrain estimates of paleolake levels derived from the diatom data. High-frequency (decadal) fluctuations in the de-trended δ18O record mirror variations in wet/dry cycles inferred from Banff tree-rings, demonstrating the sensitivity of the oxygen-isotope values to changes in regional moisture balance. Low frequency (multi-centennial) isotopic changes may be associated with shifts in the seasonal distribution of precipitation. From 200 B.C. to A.D. 800, both diatom and isotope records indicate that climate was dry and lake level low, with poor diatom preservation and high organic carbon: nitrogen ratios. Subsequently, lake level rose slightly, although the climate was drier and more stable than modern conditions. At A.D. 1200, lake level increased to approximately 6 m below present elevation, after which the lake fluctuated between this elevation and full stage, with particularly cool and/or wetter conditions after 1700. The hydrologic balance of the lake shifted abruptly at 1894 because of the establishment of a lumber mill at the lake’s outlet. Spectral analysis of the δ18O data indicates that severe droughts occurred with multi-decadal (50 to 70 yr) frequency.