Agricultural intensification and urbanization can cause massive changes in the amounts of nutrients and other contaminants exported to lakes. We analyzed sediment core and water quality data, together with historical information on land use/land cover (LULC), to reconstruct changes in phosphorus (P) loading and cycling in Lake Wilcox, Ontario, Canada, since the early 1920s. The original forested watershed was first converted for farming and then urbanization since the 1960s. The watershed now comprises 60% urban land cover. Post-2000 water quality data indicates that the lake has experienced rapid salinization caused by de-icer (i.e., road salt) application in the watershed. Further evidence for the salinization of the lake accompanying urbanization is also found in the temporal trend in sodium concentrations in the sediment core. The large increase in P loading associated with the agricultural intensification after World War II caused the eutrophication of the lake. However, improved soil conservation since the 1980s and urban stormwater management since the 1990s have brought watershed P loading and sediment accumulation down to levels comparable to the early 1900s. Yet, the lake continues to exhibit eutrophication-like symptoms, especially the intensification of hypoxia in the hypolimnion. The available water column chemistry data indicate that the continued hypoxia is not driven by external P loading from the watershed, but rather by rapid salinization that reduces the lake’s mixing, thereby enhancing internal P loading. Curbing salt inputs will therefore be essential to restore the lake. The findings are applicable to other freshwater ecosystems experiencing salinization.