Manchar Lake, Pakistan's biggest lake in the arid zone, faces human-induced salinity issues. This study investigated its effects on the multifaceted ecosystem services, including serving as a source of drinking and irrigation water and aquatic health through assessing fish diversity and characteristics. Analyses of 189 water samples from 21 sites revealed spatiotemporal variations in major ions contributing to lake water salinity. The study assessed water suitability for drinking and agriculture using the water quality index (WQI), sodium adsorption ratio (SAR), magnesium hazard (MH), sodium percent (Na%), and Kelly's ratio (KR). The WQI, ranging from 141 to 408, indicated that the lake water was unfit for drinking. In some seasons, such as the pre-monsoon period, the lake water was deemed unsuitable for irrigation due to high SAR values (18 +/- 4 g/L, average +/- standard deviation), consistently rising MH values exceeding 66 in all seasons and elevated sodium percentages surpassing 66% in both the pre-monsoon and monsoon seasons. The KR remained acceptable (averaging 0.8 to 2.5) in all seasons. Fish health in highly saline conditions was assessed using data from interviews, focus group discussions, and fish sampling (1684 fish from 10 sites). Results depicted that high salt contamination severely impacted fish length and weight. The study found low richness (Simpson's biodiversity: 0.697 and Shannon Weaver: 1.51) and evenness (Pielou's index: 0.48) among the fish populations. Since 1998, Manchar Lake has seen a decline in fish varieties from 32 to 23, with changes in fish species' feeding habits. To improve lake water quality, the study recommends diverting saline water to the sea before and after the monsoon season while utilizing freshwater from alternative sources to fill any water deficit.