Lacustrine sediments were preserved in local depressions of the Chinese Loess Plateau contemporaneous with the deposition of loess and red clay from the Neogene to Quaternary. These lacustrine sediments can provide key constraints for reconstructing the differential uplift of the Ordos Plateau, as well as the tectonic-geomorphic evolution and paleoclimate changes of the Loess Plateau since the Middle Pliocene. The Wuqi paleo-lake was an ancient lake developed along the southern piedmont of the Baiyu Mountains. Here, the sedimentary environments and evolutionary stages of the paleolake were systematically analyzed by combing the sedimentary characteristics of regional strata and research on high-resolution typical profiles. Paleomagnetic measurements demonstrate that polarity zones recorded in the Hegou profile correspond well with polarity zones since the C3n.2n normal subchron, with the basal age determined at approximately 4.5 Ma. The field characteristics, grain size, magnetic susceptibility, combined with paleomagnetic ages reveal that the Wuqi Paleolake was formed at approximately 3.6 Ma, evolving through the deep lake, shallow lake, sedimentary basin, and floodplain phases before going extinct at approximately 0.8 Ma. Since 0.8 Ma, loess-paleosol sequences have accumulated in the paleolake area, resembling those in other regions of the Loess Plateau. The demise of the Wuqi Paleolake is attributed to the uplift of the Baiyu Mountains, the modification of regional drainage networks, and accelerated headward erosion of rivers. The sedimentary evolution of the Wuqi Paleolake provides key evidence for understanding neotectonic movements and paleoenvironmental evolution of the Loess Plateau.