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Climate change is affecting the subtropical northern Mexico by reducing the amounts of rainfall and increasing the severity of droughts. The rainfall system of this area is governed by the North American Monsoon which mechanism and dynamics regarding past global temperature change are still unclear. Hydroclimate variation of the northwest Mexico, specifically during the late Pleistocene and Holocene is an active area of debate, with uncertainty in the nature and sources of precipitation. Previous research has inferred the influences of winter storms, summer monsoonal rain and autumn tropical cyclones. Moreover, the impacts on regional and local ecosystems are not well constrained. In this thesis, I employ organic and inorganic geochemical methods, studying a variety of lipid biomarkers from aquatic and terrestrial sources, as well as the isotopic composition of endogenic carbonates to investigate two basins in central northern Mexico: the Satiaguillo and El Potosi basins at the western and eastern limits of the Chihuahua Desert. I investigate the response of lacustrine and terrestrial habitats of these basins to hydrological changes occurring since the late last glacial. Biomarkers from both sedimentary records reflect variable input of organic matter from algal and bacterial biomass, aquatic microfauna and surrounding vegetation. Changes in these inputs reveal distinct stages of ecosystem development and correlate with endogenic carbonate isotopic changes over the last 27,000 years on the Santiaguillo area and 20,000 years on the El Potosi area. Overall, the areas presented opposite environmental conditions during the last glacial maximum and deglaciation period. However, over the early- and mid-Holocene, both records reveal increasing aridity and a shrinking water body, while the late Holocene was characterized by less dry environment with higher proportions of C4 grasses. Finally, this thesis illustrates the great potential of biomarker applications for paleoenvironmental reconstructions of dry settings areas with poor pollen preservation and other fossil particulate matter.