Over the past two decades, Lake Taihu has undergone intensive remediation and restoration, compounded by climate change impacts such as warming and heatwaves, driving significant shifts in the composition and structure of its aquatic ecosystem, encompassing phytoplankton, zooplankton, benthic macroinvertebrates, and macrophytes. Leveraging long-term monitoring data from the Taihu Laboratory for Lake Ecosystem Research (TLLER), a National Scientific Observation and Research Station, including water quality, phytoplankton, and macrophyte data spanning 2005 to 2025, macroinvertebrate data from 2007 to 2025, zooplankton data from 2012 to 2025, alongside concurrent hydrological and meteorological observations, this study elucidates the characteristics and underlying mechanisms governing the structural changes in the Lake Taihu ecosystem over the past two decades under the combined influences of declining nitrogen concentrations, rising water temperatures, drought and flood events, fishing bans, and other anthropogenic and climatic drivers. The results demonstrate that: (1) In the past five years, water quality in Lake Taihu has improved markedly. The annual mean total nitrogen concentration decreased from 3.71 mg/L in 2006 to 1.56 mg/L in 2025. The annual mean total phosphorus concentration from 2021 to 2025 (0. 089 mg/L) was 26% lower than the mean from 2005 to 2020 (0.120 mg/L). Pronounced spatial disparities in water quality improvement were observed: heavily polluted northwestern areas exhibited substantial amelioration, whereas southern and eastern areas, historically characterized by better water quality and extensive submerged vegetation, displayed negligible improvement or even degradation. (2) Major biotic assemblages exhibited substantial spatiotemporal dynamics. Since 2023, cyanobacterial biomass has declined significantly, accompanied by a marked reduction in both biomass and dominance of Microcystis spp. —the primary bloom-forming cyanobacterium—while the dominance of filamentous cyanobacteria such as Dolichospermum spp. and Pseudanabaena spp. , as well as diatoms including Aulacoseira spp. , Cyclotella spp. , and Nitzschia spp. , has increased. Within the zooplankton community, the dominance of Bosmina spp. (Cladocera) has diminished considerably, whereas that of Limnoithona sinensis(Copepoda) has risen significantly. Macroinvertebrate density has declined sharply, primarily attributable to a substantial reduction in the dominant pollution-tolerant species Limnodrilus hoffmeisteri, while the dominance and density of the relatively clean-water species Corbicula fluminea have increased notably. Conversely, submerged vegetation remains severely degraded compared to 20 years ago, showing no significant recovery despite recent water quality improvements. Relative to 2014, the distribution area of submerged vegetation in 2025 contracted sharply. The population of Potamogeton wrightii within the traditional submerged vegetation zone along the transect from Guishan to Manshan Island, Xishan, and South Lake Taihu has undergone drastic shrinkage. In East Lake Taihu, submerged plant communities have been largely supplanted by Trapa incisa, forming a continuous monoculture frequently exceeding 95% coverage. The Nymphoides peltata community in South Lake Taihu has experienced severe decline, and vegetation coverage in Xukou Bay also decreased significantly in 2025. (3) From the perspective of ecological diversity, with the exception of phytoplankton, the diversity of most biotic groups has not increased significantly, spatial heterogeneity has diminished, and submerged vegetation remains critically degraded. Consequently, the ecosystem structure of Lake Taihu remains highly vulnerable, with a persistent risk of large-scale cyanobacterial blooms. This study suggests that the management of Lake Taihu may have entered a new phase characterized by “improved water quality—ecosystem restructuring—insufficient system resilience”. While reduced nutrient loading into the lake exerts significant top-down regulation on ecosystem structure, climate warming, declining external nutrient loading, fishing bans, and extreme climatic events such as floods and droughts have emerged as pivotal drivers of biotic shifts. Future management strategies for Lake Taihu should transition from “achieving water quality standards” to “restoring ecosystem health”. It is imperative to strengthen the monitoring and assessment of ecological effects stemming from fish community alterations. While maintaining stringent control over external nitrogen and phosphorus inputs, coordinated measures should be implemented to optimize fish community structure and restore submerged vegetation, thereby enhancing the overall health and resilience of the Lake Taihu ecosystem.