We present high-resolution paleoceanographic records of surface and deep water conditions within the northern Red Sea covering the last glacial maximum and termination I using alkenone paleothermometry, stable oxygen isotopes, and sediment compositional data. Paleoceanographic records in the restricted desert-surrounded northern Red Sea are strongly affected by the stepwise sea level rise and appear to record and amplify well-known millennial-scale climate events from the North Atlantic realm. During the last glacial maximum (LGM), sea surface temperatures were about 4°C cooler than the late Holocene. Pronounced coolings associated with Heinrich event 1 (∼2°C below the LGM level) and the Younger Dryas imply strong atmospheric teleconnections to the North Atlantic. Owing to the restricted exchange with the Indian Ocean, Red Sea salinity is particularly sensitive to changes in global sea level. Paleosalinities exceeded 50 psu during the LGM. A pronounced freshening of the surface waters is associated with the meltwater peaks MWP1a and MWP1b owing to an increased surface-near inflow of “normal” saline water from the Indian Ocean. Vertical δ18O gradients are also increased during these phases, indicating stronger surface water stratification. The combined effect of deglacial changes in sea surface temperature and salinity on water column stratification initiated the formation of two sapropel layers, which were deposited under almost anoxic condition in a stagnant water body.