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Eocene strata of the Elko Formation record lacustrine deposition within the Nevada hinterland of the North American Cordillera. We present a detailed geochemical stratigraphy enabled by high‐sampling‐resolution geochronology from lacus trine limestone and interbedded volcanic rocks of the Elko Formation. Two intervals of lacustrine deposition, an early Eocene "Lake Adobe" of limited aerial extent and a laterally extensive middle Eocene "Lake Elko," are separated by ∼5 m.y. of apparent unconformity. Sediments deposited in the apparently short‐lived (49.5–48.5 Ma) early Eocene Lake Adobe exhibit high‐amplitude covariation of δ18O, δ13C and 87Sr/86Sr, which suggests a dynamically changing catchment and precipitation regime. Lake Elko formed during the middle Eocene, and its strata record three geochemically distinct phases, indicating it was a single interconnected water body that became increasingly evaporative over time. The lower Elko Formation (44.0–42.5 Ma) was deposited in a freshwater lake. Middle Elko Formation (42.5–41.2 Ma) lithofacies and geochemistry suggest that an increasingly saline and alkaline Lake Elko experienced salinity stratification‐induced hypolimnion disoxia and burial of 12C‐rich organic matter. The upper Elko Formation (41.2–40.5 Ma) records a shallow final phase of Lake Elko that experienced short residence times and a breakdown in stratification. A sharp decline of 87Sr/86Sr in the upper Elko Formation reflects an increasing aerial extent of low‐87Sr/86Sr volcanic deposits from nearby calderas. Middle Eocene strata record ponding of paleodrainage, increasing hydrologic isolation and volcanism, consistent with progressive north to south removal of the Farallon flat slab and/or delamination of the lower lithospheric mantle of the North American plate. Plain Language Summary: Large lakes formed in the region that is now northeast Nevada between 50 and 40 million years ago. This region was at high elevation and undergoing a transition from compressional to extensional plate tectonic forces at that time. The geologic record shows that lakes formation started locally at 49.5 million years ago with a short‐lived freshwater Lake Adobe. Later, approximately 43.5 million years ago, a broad Lake Elko formed and then became increasingly evaporative over the next 3 million years, likely due to removal of the shallowly subducting Farallon slab from beneath the region. Key Points: Lakes formed in the hinterland of the North American Cordillera during the Eocene during a transition from contraction to extensionLake Elko expanded and became increasingly evaporative across 3.5 Ma from 43.5–40.5 Ma, coincident with an episode of explosive siliceous magmatismLake formation and drainage isolation likely records the progressive removal of the flattened Farallon slab from beneath the Cordillera [ABSTRACT FROM AUTHOR]