Thermal structure and water quality in a large and shallow lake in Malaysia were studied between January 2012 and June 2013 in order to understand variations in relation to water level fluctuations and in-stream mining activities. Environmental variables, namely temperature, turbidity, dissolved oxygen, pH, electrical conductivity, chlorophyll-A and transparency, were measured using a multi-parameter probe and a Secchi disk. Measurements of environmental variables were performed at 0.1 m intervals from the surface to the bottom of the lake during the dry and wet seasons. High water level and strong solar radiation increased temperature stratification. River discharges during the wet season, and unsustainable sand mining activities led to an increased turbidity exceeding 100 NTU, and reduced transparency, which changed the temperature variation and subsequently altered the water quality pattern.