Arid-zone lakes serve as key indicators of watershed ecological and environmental changes, playing vital hydrological and ecological roles in maintaining regional water-cycle balance and ecosystem stability. This study examines lake dynamics and their climatic responses in the Hunshandake Sandy Land, a climate-sensitive region in northern China characterized by pronounced aridification and ecological fragility. By integrating multi-source datasets including Landsat, Sentinel, Global Surface Water (GSW), and Global Land Analysis and Discovery (GLAD), water extent was mapped applying the water-index method, water classification enhancement approach, and random-forest classification. Changes in water storage were estimated by combining stage-area relationships and volume-area empirical curves. Based on these methods, we quantified monthly and annual changes in lake area (＞0.01 km2) and water storage from 2003 to 2023, while analyzing relevant meteorological factors. Results indicate significant intra-annual seasonality, exhibiting a single-peak trend in lake extent from May to October. At the interannual scale, the lake system has undergone persistent degradation trend over the 21-year record. Total lake area had decreased by 37.17% compared to 2003. The number of lakes declined from 1,198 to 466, primarily driven by losses of small, shallow lakes and widespread drying. Under regional climatic aridity conditions, 8% of formerly permanent water bodies converted to seasonal status, while 86% of seasonal water bodies experienced episodic drying. Net water storage decreased at a rate of -0.005 km3·yr?1, with medium-to-large lakes (≥1km2) accounting for 60% of the storage loss. Climate-driven mechanisms indicate that precipitation, vapor pressure deficit (VPD), and air temperature exhibit spatiotemporal lags of 0-2 months, with precipitation and VPD both peaking at a 1-month lag. VPD emerges as primary negative factor influencing annual and monthly water body area, while precipitation dominates the interannual regulation of seasonal water body area and, jointly governs positively monthly fluctuations with potential evapotranspiration (ET). Temperature indirectly affects lake dynamics by increasing the VPD and evapotranspiration demand. This regional-scale study elucidates the response mechanisms and spatiotemporal heterogeneity of arid-region lakes under climate change, providing data support for adaptive water-resource management in ecologically fragile areas.