Knowledge of climatic change during the past 2000 years in southwestern China is important for understanding the evolution of the Indian summer monsoon (ISM). For this study, we conducted systematic analysis of magnetic minerals in sediments from Lugu Lake in northwestern Yunnan Province. Magnetic measurements suggest that magnetite dominated the studied magnetic mineral assemblages. Both natural origins and anthropogenic activities are considered to be the sources of the magnetic minerals based on the correlations of χ vs. χ_fd% and χ_ARM/χ. The magnetic minerals of natural origins can be attributed to terrestrial detrital input rather than biogenic sources. Combined with diatom and geochemical records, magnetic parameters including χ, χ_fd%, and S_-ratio can be used as sensitive indicators of ISM change, and suggest that two significant dry periods occurred in the Medieval Warm Period (MWP, 800–1300 CE) and Roman Warm Period (RWP, 0–400 CE) and two relatively wet intervals in the Dark Ages Cold Period (DACP, 400–800 CE) and Little Ice Age (LIA, 1300–1850 CE). Significant shifts of magnetic parameters in Lugu Lake samples revealed sensitivity to precipitation-controlled catchment erosion. The climatic patterns shown by the magnetic characteristics were generally similar to those in extensive areas dominated by the ISM. We speculate that rainfall caused by the ISM during the last 2000 years may be related to the variations of El Niño/Southern Oscillation (ENSO) and the mean position migration of the ITCZ.