Recent global warming has heightened the frequency of extreme hydroclimatic events. Yet the fundamental processes and drivers controlling these hydroclimatic responses remain poorly understood. This study reconstructs the hydroclimatic evolution of Yangzong Lake in southwestern China across the Last Glacial Maximum and deglaciation at an ~ 8-yr resolution, based on sedimentological and geochemical proxies. Comparison with other paleoclimatic archives across the Asian monsoon region reveals a consistent long-term wetting and warming trend, fundamentally driven by rising temperatures in the Northern Hemisphere and increasing sea levels. Notably, a decoupling pattern emerged during Heinrich Stadial 1 (HS1) and the Younger Dryas (YD), characterized by dry and cold conditions in northeastern China contrasting with gradually improving hydroclimatic conditions in the south. We propose that this contrast was primarily driven by sharp cooling at high northern latitudes, which deteriorated hydroclimate in the northeast, while persistent warmth over the tropical oceans and monsoonal land surfaces may have contributed to improved hydroclimatic conditions in southern China during HS1 and helped maintain stable hydroclimatic conditions there during the YD. Our findings further indicate that hydroclimatic extremes and intensified aeolian activity in southwestern China were closely associated with local dry and cold conditions. At the same time, aeolian activity in this region was also modulated by vegetation cover and the prevailing hydroclimatic regime. These results underscore the imperative for region-specific strategies in China’s hydroclimatic regulation to effectively address extreme events in a warming world.