Glycerol dialkyl glycerol tetraethers (GDGTs) are widespread but unique membrane-spanning lipids of many Archaea and some Bacteria. However, their specific biological sources and the associated environmental controls on their distribution remain unclear, especially in lacustrine settings, hindering our understanding of these compounds and their application as environmental proxies. Here we investigated the GDGT distributions across a large bottom water dissolved oxygen (DO) gradient (0.10–7.20 mg/L) using surface sediments of Lake Yangzonghai, a warm monomictic lake in southwestern China. We show that the distributions of both branched (br) and isoprenoidal (iso) GDGTs co-vary significantly with bottom water DO concentration. The relative abundances of tetramethylated brGDGTs, 5-methyl penta- and hexamethylated brGDGTs and isoGDGT-0 show a stepwise increase as bottom water DO concentration decreases. On the other hand, the relative abundances of 6-methyl penta- and hexamethylated brGDGTs and crenarchaeol exhibit a stepwise decline with a decrease in bottom water DO concentration. Genetic data indicate these DO-induced changes in GDGT parameters are related to changes in the bacterial and archaeal communities across the oxycline in the lake. For example, the high abundance of isoGDGT-0 in low DO samples coincides with a high abundance of methanogenic archaea and Bathyarchaeota. We propose that brGDGT-producing bacteria might include a diversity of other phyla in addition to the proposed source organism acidobacteria; different groups of anaerobic and aerobic bacteria are likely to contribute to the increased abundance of 5-methyl brGDGTs and 6-methyl brGDGTs in low and high DO zones, respectively. Consequently, the MBT′ and MBT′6ME brGDGT indices display strong correlations with DO concentration. Importantly, the MBT′5ME index is not significantly influenced by changes in DO concentration, suggesting that this index might be more resilient to these impacts and more suitable to reconstruct temperature in lake systems.