Hulun Lake is the largest freshwater lake in northern Inner Mongolia and even minor changes in its level may have major effects on the ecology of the lake and the surrounding area. In this study, we used high-precision elevation data for the interval from 2003–2009 measured by the Geoscience Laser Altimetry System (GLAS) on board the Ice, Cloud, and land Elevation Satellite (ICESat) to assess annual and seasonal water level variations of Hulun Lake. The altimetry data of 32 satellite tracks were processed using the RANdom SAmple Consensus algorithm (RANSAC) to eliminate elevation outliers, and subsequently the Normalized Difference Water Index (NDWI) was used to delineate the area of the lake. From 2003–2009, the shoreline of Hulun Lake retreated westwards, which was especially notable in the southern part of the lake. There was only a small decrease in water level, from 530.72 m to 529.22 m during 2003–2009, an average rate of 0.08 m/yr. The area of the lake decreased at a rate of 49.52 km²/yr, which was mainly the result of the shallow bathymetry in the southern part of the basin. The decrease in area was initially rapid, then much slower, and finally rapid again. Generally, the lake extent and water level decreased due to higher temperatures, intense evaporation, low precipitation, and decreasing runoff. And their fluctuations were caused by a decrease in intra-annual temperature, evaporation, and a slight increase in precipitation. Overall, a combination of factors related to climate change were responsible for the variations of the water level of Hulun Lake during the study interval. The results improve our understanding of the impact of climate change on Hulun Lake and may facilitate the formulation of response strategies.