We test several methods of ostracod-based palaeoenvironmental reconstruction using indicator species approach, mutual ecological/climatic range methods, transfer functions, modern analogue technique and morphological variation within Cyprideis torosa in reconstructing the site evolution of a late Quaternary small lake basin in Thuringia, Central Germany. Sediment sections containing a diverse ostracod fauna were studied and compared with those from modern water bodies of Thuringia. Palynological investigations were executed to reconstruct the environmental conditions in the catchment area and for a obtaining a biostratigraphical framework. The brackish water ostracod Cyprideis torosa as well as the foraminifer Haplophragmoides indicate phases of saline groundwater influence, fed by salt bearing sediments of the Triassic basement. The accompanying freshwater ostracod fauna, however, reflects only low variations of salinity and temperature. Environmental changes in salinity, temperature and ecological stability indicated by microfossils and pollen are caused by an interplay of climatic shifts and the local geological and hydrological setting.