Climate-induced variation in lake level can affect physicochemical properties of endorheic lakes, but its consequences for phototrophic production and regime shifts are not well understood. Here, we quantified changes in the abundance and community composition of phototrophs in Kenosee and White Bear lakes, two endorheic basins in the parkland Moose Mountain uplands of southeastern Saskatchewan, Canada, which have experienced > 8 m declines in water level since ~ 1900. We hypothesized that lower water levels and warmer temperatures should manifest as increased abundance of phytoplankton, particularly cyanobacteria, and possibly trigger a regime shift to turbid conditions due to evaporative concentration of nutrients and solutes. High-resolution analysis of sedimentary pigments revealed an increase in total phototrophic abundance (as β-carotene) concurrent with lake-level decline beginning ~ 1930, but demonstrated little directional change in cyanobacteria. Instead, significant increases in obligately anaerobic purple sulfur bacteria (as okenone) occurred in both lakes during ~ 1930–1950, coeval with alterations to light environments and declines in lake level. The presence of okenone suggests that climate-induced increases in solute concentrations may have favored the formation of novel bacterial habitats where photic and anoxic zones overlapped. Generalized additive models showed that establishment of this unique habitat was likely preceded by increased temporal variance of sulfur bacteria, but not phytoplankton or cyanobacteria, suggesting that this abrupt change to physical lake structure was unique to deep-water environments. Such climate-induced shifts may become more frequent in the region due to hydrological stress on lake levels due to warming temperatures across the Northern Great Plains.