The lake level has periodically risen and fallen over the centuries, inundating ancient shoreline settlements. Artefacts have been recovered from what is now known as the submerged city of Chigu at the lake's eastern end, dating from the 2nd century BC. The Mikhaylovka inlet near Karakol also reveals the remains of a partly submerged village, though in the last 500 years geological evidence suggests that water levels have been dropping, albeit only around 2m overall.

Before the Kyrgyz people arrived in the 10th to 15th centuries, this area appears to have been a centre of Saka (Scythian) civilisation. Legend has it that Timur (Tamerlane) later used it as a summer headquarters. There are at least 10 documented settlements currently under the waters of the lake, and treasure hunters have long scoured the lakebed for trinkets, attributing finds to everyone from Christian monks to Chinggis (Genghis) Khan.

In the 1860s and 1870s, after tsarist military officers and explorers had put the lake on Russian maps, immigrants flooded in to found low-rise, laid-back, rough-and-ready towns – the establishment of Karakol in 1869 was followed in the 1870s by Tüp, Teploklyuchenka (now Ak-Suu), Ananyevo, Pokrovka (now Kyzyl-Suu) and a string of others, many of whose Cossack names have stuck. Large numbers of Dungans and Uyghurs arrived in the 1870s and '80s following the suppression of Muslim uprisings in China’s Shaanxi, Gansu and Xinjiang provinces. At that time local Kyrgyz and Kazakhs were still mostly nomadic.

In the USSR era health spas were dotted along the lake's shores, but the Issyk-Köl region (along with much of Kyrgyzstan beyond Bishkek), was off limits to foreigners. Locals mention vast, officially sanctioned plantations of opium poppies and cannabis around the lake, though most of these had disappeared under international pressure by the early 1970s. More importantly, Issyk-Köl was used by the Soviet navy to test high-precision torpedoes, far from prying Western eyes. An entire military-research complex grew around Koy-Sary, on the Mikhaylovka inlet near Karakol. After independence in 1991, Russia's new president, Boris Yeltsin, asked that it be continued but Kyrgyz President Askar Akaev shut down the whole thing.

These days the most secretive thing in the lake is the mysterious jekai, a Kyrgyz version of the Loch Ness monster. Jokes about the ‘Kyrgyz navy’ refer to a fleet of some 40 ageing naval cutters, now mothballed at Koy-Sary (which remains out of bounds to visitors) or decommissioned and hauling goods and tourists up and down the lake. Tourism, which initially crashed along with the Soviet Union, has revived in the last decade thanks to an influx of moneyed Kazakh tourists and Russian athletes, who favour the area's mild climate and high altitude as a winter-training zone.