Theories on the hydrological history of Lake Baikal, the world's oldest and deepest body of freshwater, and its surrounding great rivers, are currently based solely on geological evidence and are conflicting. Baikal is inhabited by numerous zoogeographical enigmas but their high level of endemism has hindered phylogeographic inferences. We provide a biological perspective of the region's palaeo-hydrological development based on the demographic and genealogical history of the widespread Thymallus spp. (grayling). Phylogenetic reconstruction reveals that old lineages of grayling (pre-Pleistocene) currently inhabit the Enisey, Lena and Amur River basins. For Lake Baikal however, we conclude that a mid-Pleistocene colonization (110 000–450 000 years ago) of an unoccupied niche has occurred. Population genetic inferences support an Enisey–Angara river route of colonization into Baikal, corresponding to the cataclysmic palaeo-hydrological event that led to the formation of the lake's only contemporary outlet, and a subsequent range expansion several thousand kilometres into the uppermost reaches of the Selenga River basin. The evolutionary history of Lake Baikal grayling is congruent with the controversial hypothesis of repeated glaciation. However, considering the extraordinary levels of endemism and proposed Miocene or Oligocene coalescence of other faunal lineages, a less profound but equally consequential cycle of environmental perturbations may have taken place. Bi-parentally inherited microsatellite DNA loci supported the phylogenetic relationships of Thymallus spp. and the geographical expansion of Baikal grayling strikingly well. A Markov Chain Monte Carlo modelling approach suggested severe contemporary population decline during the last century, possibly reflecting the influence of an uncontrolled fishery on this treasured ecosystem. These complementary pictures of the demographic history of grayling underscore the breadth of historical inquiry that can be entertained through the modelling of sufficient molecular data, and may significantly alter the zoogeographical and limnological perspectives of Baikal's history.