We investigated a late glacial-Holocene lacustrine sediment archive located at 4,050 m a.s.l. in the small carbonate-free catchment of Lake Panch Pokhari, Helambu Himal, Nepal. A δ¹⁸O sugar biomarker record was established by applying novel compound-specific δ¹⁸O analysis of plant sugar biomarkers (Zech and Glaser in Rapid Commun Mass Spectrom 23:3522-3532, 2009). This method overcomes analytical challenges such as extraction and purification faced by previous methods aimed at using δ¹⁸O of aquatic cellulose as a paleoclimate proxy. The δ¹⁸O results for sugar biomarkers arabinose, xylose and fucose agree well and reveal a pronounced trend towards lower δ¹⁸O values during the deglaciation and the onset of the Bølling/Allerød interstadial. By contrast, the period of the Younger Dryas is characterized by higher δ¹⁸O values. The early Holocene again reveals lower δ¹⁸O values. We suggest that our lacustrine δ¹⁸O record reflects coupled hydrological and thermal control. It is strongly related to changes in the oxygen isotopic composition of paleo-precipitation and resembles the δ¹⁸O records of Asian speleothems. With respect to the 'amount effect,' the record is interpreted as reflecting the Indian Summer Monsoon intensity. The precipitation signal is, however, amplified in our record by evaporative ¹⁸O enrichment that is controlled by the ratio of precipitation to evaporation. We suggest that our δ¹⁸O record reflects the variability of the Indian Summer Monsoon, which was strong during the Bølling/Allerød interstadial and early Holocene, but weak during the Younger Dryas stadial. This interpretation is corroborated by a pollen-based index for Lake Panch Pokhari that estimated the strength of the Indian Summer Monsoon versus the strength of the Westerlies. Millennial-scale synchronicity with the Greenland δ¹⁸O temperature records highlights the previously suggested strong teleconnections between the Asian Monsoon system and North Atlantic climate variability.