The results of a seismic stratigraphic analysis of a closed lake basin, Lago Cardiel, in southernmost South America are reported. Very few high-resolution, continental records spanning the Late Quaternary have been obtained from this region. Seismic sequence stratigraphic analysis allows a reconstruction of lake level variations. Two major hiatuses of unknown age occurred during the early evolution of the basin with the deposition of an alluvial fan in a restricted area in the intervening time period. Following the development of a relatively shallow lake during the late Pleistocene and a short desiccation pulse around 11 220 14C yr BP, a transgression of over 135 m occurred at the beginning of the Holocene. The transgression was associated with the formation of beach ridges preserved in the lake stratigraphy on the floor of the modern Lago Cardiel at four different elevations. The preservation of largely unreworked beach ridges indicates a stepwise rise in the lake level. There is no seismic evidence of a major lowering of the lake below modern level during the entire Holocene. Deposition since the mid-Holocene is marked by strong lateral differences in sediment accumulation with a depocentre slightly to the north of the basin midpoint and a pronounced mounded distribution. Seismic reflection geometries, as well as sedimentological characteristics indicate a lacustrine contourite drift covering an area of 80–100 km2. As Lago Cardiel is under the influence of westerly winds, these most likely drove lake circulation. The identification of drowned beach ridges and of contourite drifts illustrates that high-resolution seismic stratigraphy is not only a powerful tool in reconstructing past lake level elevations for closed lake basins, but it can also provide information about the rate of lake level changes and the presence and strength of lake currents.