Lake Urmia has experienced severe environmental degradation, mainly characterized by the enormous reduction of its surface area and water level. This issue has been mainly attributed to land-use and land-cover changes, in particular related to agricultural expansion and intensification. In this study, we used the DPSIR framework (D: driving forces, P: pressures, S: states, I: impacts, and R: responses) to systematically describe the ecosystem service dynamics related to anthropogenic activities and climatic parameters in the region. We reviewed the literature and used remote sensing, agricultural, climatic and hydrological data together with expert knowledge to assess the main driving forces and pressures, resulting land-use transitions and their spatiotemporal impacts on ecosystem services and biodiversity using a matrix-based assessment approach. We identified population growth, economic incentives and climate change as the most important driving forces, leading to altered agricultural activities, numerous dam constructions and droughts. Since 1987 cropland areas doubled at the expense of bare soils and natural vegetation, the lake hast lost more than half of its surface area, urban and freshwater areas increased threefold and by 50%, respectively. This favored crop and freshwater provision, while all other ecosystem services remained nearly constant or decreased, though spatial patterns were heterogeneous. For example, regulating and cultural services, and biodiversity mainly decreased at the shorelines of the lake, while provisioning services increased along the major rivers and close to cities. To address the land-use transitions with the most profound impact on ecosystem service provision, we recommend the following measures: increase the water supply to the lake, reduce cropland expansion, manage existing croplands more sustainably and protect natural vegetation. Our study provides a comprehensive overview of the regional ecosystem service dynamics and a valuable baseline for future research and environmental management in the basin.