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The Middle Holocene period witnessed significant environmental and cultural transitions regarding the deceleration of sea‐level rise and the emergence of early agriculture, which profoundly moulded human–environment interactions in coastal regions. The Hemudu Culture (7000–5000 cal. a BP) is primarily distributed in eastern China coastal plains and marks a milestone in the origin of rice agriculture, and thus serves as an ideal case for examining these dramatic transitions. However, most existing studies have only focused on one particular aspect of the interactions amongst cultural evolution, subsistence strategies and sea‐level fluctuations in the Yaojiang Valley, and comprehensive understanding of cultural responses to Middle Holocene sea‐level fluctuations across the Ningshao Plain remains ambiguous. In this multi‐proxy study, pollen, phytolith and diatom remains from a high‐resolution profile of the Xiawangdu site (Hangzhou Bay, eastern China), along with a systematic collection of archaeological sites and radiocarbon dates for the Hemudu and Liangzhu cultures, were employed to assess human adaptation to the coastal environment. Coinciding with the cultural interruption between 6200 and 5600 cal. a BP, induced by Middle Holocene sea‐level transgression, Hemudu Culture diffused from the Yaojiang Valley northward to the Zhoushan Islands and southward to the Ningbo Plain, e.g. the Xiawangdu site. The regional ecological environment has experienced an evolutionary sequence from marine transgression (6200–5600 cal. a BP), to coastal lagoon (5600–5300 cal. a BP), through to freshwater wetland (5300–4300 cal. a BP). Settlements of pile dwellings and terraces were constructed to adapt to the hydrological transition from coastal lagoon to freshwater wetland around 5300 cal. a BP. In addition, evidence of both rice phytoliths and Poaceae pollen suggests that rice had already been domesticated by 5600 cal. a BP. Thus, the dispersal, settlement and subsistence of Hemudu Culture in the coastal lowlands of eastern China were largely dependent upon sea‐level fluctuations. [ABSTRACT FROM AUTHOR]