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Pediastrum Meyen is often well preserved in lake sediments and its abundance and species composition are very sensitive to changes in the aquatic environment. Previous studies have shown that changes in the composition or abundance of Pediastrum species have great potential for studying paleoenvironmental evolution. However, until now, very few studies have explored the environmental significance of Pediastrum and used it as a paleoclimatic or paleoenvironmental indicator. In this study, we investigated the occurrence of Pediastrum in 26 natural lakes and 17 reservoirs, with varying hydro-chemical and climatic gradients, in China and western Mongolia. 25 Pediastrum taxa (including species and varieties) were found in the surface sediments of 36 different water bodies, and the spatial distribution characteristics of Pediastrum species and the environmental factors determining the community composition were identified using both Canonical Correspondence Analysis (CCA) and extended Huisman-Olff-Fresco (eHOF) methods. The results demonstrate that mean annual temperature is the most significant environmental variable influencing modern Pediastrum species composition and abundance. Water salinity and trophic status are probably secondary factors that are responsible for the variations in the abundance of Pediastrum species, and they cannot survive in water bodies with total dissolved solids (TDS) higher than ~ 2–3 g L−1. Overall, our results indicate that Pediastrum assemblages have great potential for reconstructing environmental variables in the past, and therefore that they can be used for environmental monitoring in global warming research. • MAT is the most significant environmental factor to explain Pediastrum assemblages. • We explored changes of Pediastrum assemblages in specific environmental gradients. • This study shows the potential of Pediastrum as an indicator of paleoenvironment. [ABSTRACT FROM AUTHOR]