Through complex dynamic water exchanges, Poyang Lake and the Yangtze River constitute the Yangtze–Poyang Lake Flood and Low Flow Regulation System, which plays a crucial role in flood and drought prevention in the middle and lower Yangtze region. Utilizing long-term hydrological data and remote sensing interpretations, we clarified the water regulation and storage processes of Poyang Lake in response to inflows from the Yangtze River mainstream and the Five Rivers. By incorporating the operational phases of the Three Gorges Reservoir (TGR), we identified changes in the lake’s flood and low-flow regulation capacity, along with the influencing factors, before and after the TGR’s operation. The main findings are:(1) During the dry season (December to April of the following year) and discharge season (May to early June), the daily regulation volume of Poyang Lake is mostly positive, increasing stored water; during the flood season (mid-June to early September) and impoundment season (mid-September to November), the opposite occurs, while annual total water inflow and outflow remain largely balanced. The daily regulation volume is significantly positively correlated with Yangtze mainstream flow and incoming water from the Five Rivers; (2) After the Three Gorges Reservoir operation, the daily regulation volume changed: positive values increased in the discharge season, the shift from positive to negative occurred earlier in the flood season, and negative values intensified late in the flood season. Consequently, the lake’s water storage decreased by approximately 1.41 billion m3 during the pre-flood season (mid-June) and by roughly 8.55 billion m3 at the end of the flood season (late June), respectively. These changes resulted from Poyang Lake’s enhanced discharge capacity, increased mainstream and tributary flow during the discharge season, and faster recession during the impoundment season; (3) Affected by hydrological processes and storage-discharge adjustments, Poyang Lake’s water storage function weakened in the late flood and discharge seasons. Notable “drawdown” and “rapid flood-drought transition” phenomena led to frequent extreme low water levels and prolonged droughts. Conversely, lower water storage increased Poyang Lake’s available capacity during discharge season, enhancing its regulation of floods from the Five Rivers. By contrast, the Poyang Lake’s smaller pre-flood storage capacity weakened its regulatory effects on Yangtze River floods, making it inadequate for extreme events. Additionally, the lake’s capacity to supplement the Yangtze’s flow declined at the end of the flood season and impoundment season, but remained stable during the dry season. These findings enhance our understanding of Poyang Lake’s regulatory mechanisms and support effective management of the river-lake system.