The eastern coastal zone of China is densely populated and widely recognized as a center of rice domestication, which has undergone dramatic sea-level fluctuation during the Holocene epoch. Hemudu culture is distributed mainly in the eastern coastal area and was once presumed as a mature agricultural economy based on rice, making it an ideal case for examining the remarkable human-environment interaction in the Lower Yangtze River. Though numerous studies have been conducted on the cultural evolution, ecological environment, and rice domestication of Hemudu culture, the impact of sea-level fluctuation on human settlement and food production remains controversial. In this study, we report high-resolution pollen, phytolith, and diatom records, and accurately measured elevation from the Yushan site, which is the closest site of Hemudu culture to the modern coastline. Based on the data gathered, we suggest that the Hemudu culture and subsequent Liangzhu culture developed in the context of regression and were interrupted by two transgressions that occurred during 6300-5600 BP and 5000-4500 BP. The regional ecological environment of the Yushan site alternated between intertidal mudflat and freshwater wetlands induced by sea-level fluctuations in the mid-late Holocene. Though rice was cultivated in the wetland as early as 6700 BP, this cultivation was subsequently discontinued due to the transgression; thus, full domestication of rice did not occur until 5600 BP in this region. Comprehensive analysis of multiple proxies in this study promote the understanding of the relationship between environmental evolution, cultural interruption, and rice domestication.