In palaeolimnology, microfossils play an important role as ecological indicators of lake history. A reliable interpretation of microfossil data requires a comprehensive understanding of transport processes as well as determining whether microfossil assemblages are representative of their living communities. The occurrence of transport in ostracod taphocoenoses can be identified from the population age structure of valves. In this study, 23 surface sediment samples from Dalongchi Lake, northwestern China, were analysed for species composition, and 16 were also analysed for the population age structure of Fabaeformiscandona gyirongensis. Ostracod valves are dominated by F. gyirongensis, with frequently occurring Ilyocypris sp. in the surface sediments. The distribution and abundance of ostracods are significantly correlated with the sampling depth and grain size, implying that hydrological conditions are the major controlling factor. The dominant species F. gyirongensis seems to prefer relatively deep and stable lacustrine conditions, while Ilyocypris sp. seems to prefer shallow conditions with rich submerged macrophytes and relatively coarse substrate in Dalongchi Lake. The spatial changes in the population age structure of F. gyirongensis match the different hydrodynamic regimes within the lake, with abundant early and middle instars in deeper waters and abundant middle and late instars in shallower waters, denoting that downslope transport of valves may be responsible for the spatial changes in the population structure. Our findings, together with previous works, indicate that downslope transport of instars and subsequent depth differentiation of the population structure of ostracods can occur for different species in both marine and lacustrine settings, which potentially leads to some biases based on the “in situ” inference of microfossils in palaeoenvironmental reconstruction. Hence, careful transport process assessment of fossil assemblages based on population age structure and other characteristics, such as the ratios of adults to juveniles and carapaces to valves, is a valuable prerequisite for palaeoenvironmental analysis.