Over the past two decades, deterioration of lake ecosystems associated with rapid socio-economic development in China has acquired much attention by the public and the government. As a result, effective management for lake ecosystems is desired in response to this increasing concern and stress. Lake ecosystem management practices can be significantly improved through better understanding of lake ecosystem dynamics which is one of the fundamental disciplines in ecological dynamics. Previously, extensive efforts have been placed on the examination of ecological dynamics within ocean, forest and grassland systems as well as its application to the relevant ecosystem management. However, very few studies have been reported on the ecological dynamics of lake systems. As an extension of previous efforts on ecosystem dynamics studies, this paper focuses on the management-oriented characterization of dynamics in lake ecosystem in order to improve the overall quality of lake ecosystems and sustain a healthy lake-ecosystem condition. Based on the fundamental theories from ecosystem ecology and aquatic ecology, the characterization of lake ecosystem dynamics in this study begins with identification of major characteristics of lake ecosystem, including holism, dissipative structure, ecosystem health and services, followed by the examination of practical measures for restoring structure and function of lake ecosystems. Modeling of lake ecosystem dynamics is then conducted to reflect crucial dynamics factors and simulate various processes in lake ecosystem, such as mass inflow and outflow, system structure, food chains and network, nutrimental dynamics, internal nutrient circulation, and their ecological effects. The modeling results could be used to assist lake authorities in making lake-related decisions. In order to reflect system complexities, adaptive management measures can be incorporated into the practical management activities. It is observed from this study that characterization of lake ecosystem dynamics could not only help scientists, engineers, and planner better understand complexity of lake ecosystem and interactions among system components from a systematic standpoint, but also help local authorities enhance their management capabilities and thus improve their management practices.