A sediment record from the western Gotland Basin, northwestern Baltic Proper, covering the last 1200 years, was investigated for past changes in climate and the environment using diatoms as a proxy. The aim is to compare the environmental conditions reconstructed during Medieval times with settings occurring the last century under influence of environmental stressors like eutrophication and climate change. The study core records more marine conditions in the western Gotland Basin surface waters during the Medieval Climate Anomaly (MCA; 950–1250C.E.), with a salinity of at least 8 psu compared to the present 6.5 psu. The higher salinity together with a strong summer-autumn stratification caused by warmer climate resulted in extensive long-lasting diatom blooms of Pseudosolenia calcar-avis, effectively enhancing the vertical export of organic carbon to the sediment and contributing to benthic hypoxia. Accordingly, our data support that a warm and dry climate induced the extensive hypoxic areas in the open Baltic Sea during the MCA. During the Little ice Age (LIA; 1400–1700C.E.), the study core records oxic bottom water conditions, decreasing salinity and less primary production. This was succeeded during the 20th century, about 1940, by environmental changes caused by human-induced eutrophication. Impact of climate change is visible in the diatom composition data starting about 1975C.E. and becoming more pronounced 2000C.E., visible as an increase of taxa that thrived in stratified waters during autumn blooms typically due to climate warming.