Lake Urmia in northwestern corner of Iran was once the second largest hypersaline lake of the world, covering on average an area of 5200 km2. However, the lake has been shrinking rapidly over the last 20 years, primarily due to anthropogenic influences, while climate change has had also a detectable influence. Climate change and anthropohenic impacts on the rapid shrinkage of Lake Urmia are investigated using long-term surface meteorological records of weather stations, while the number of constructed dams and expansion of irrigated areas in the Urmia Basin are also examined. Over the past few decades, a warming trend of the order 0.18 °C decade−1 has been identified, while precipitation has been decreasing by approximately 9 mm decade−1 over the basin. As a consequence of such significant warming, evaporation from the lake has been increasing by the rate of 6.2 mm decade−1. The increased air temperature and evaporation, along with the decreased precipitation indicate that Lake Urmia has been experiencing meteorological drought conditions. The main anthropogenic influence, on the other hand, has been overwhelming diversion of water sources for irrigation, which led to the socioeconomic drought of the region because demand for water has exceeded the supply. The meteorological drought, combined by the socioeconomic drought, have contributed to the significant shrinkage of Lake Urmia, started from the mid 1990s water level peak, although the latter has had the most significant contribution. As a consequence, the water level of Lake Urmia has been rapidly declining since 1995, with 6.1 m decline for the period 1995–2009. Its surface area has been also changing by the rate of −188.3 km2 yr−1, reaching from 5503 km2 in 1998 to 2323 km2 in 2011. Under the induced meteorological and, more importantly, socioeconomic drought conditions, substantial improvements in water management practices are required to preserve or partially restore the lake.