Abstract: Lake is indispensable part of inland water ecosystem, and China harbors numerous lakes with rich biodiversity. In recent years, the degradation of lakes severely lead to the decreasing of level of biodiversity. Therefore, lake biodiversity has always been a research hot-spot in limnology. All efforts to research on lake biodiversity essentially depend on monitoring species composition, population size and distribution. Such studies traditionally rely on morphological identification through biological specimen surveys, until to Environmental DNA (eDNA) arose. eDNA exists in the environmental samples such as water, soil and sediments. This feature makes eDNA to be a good indicator to monitor past and current biodiversity. Using molecular biology methods to monitor lake biodiversity is conducive to understanding the dynamic changes of lake ecosystems and is of great significance to the development of lake ecological protection. Compared to traditional investigation methods, eDNA is an non-invasive, efficient and easy to be standardized research approach. It especially doesn’t rely on experts’ experience and professional level of morphological classification. With the development of high-throughput sequencing (HTS) technology and emergence of eDNA metabarcoding, eDNA can be used as a supplement or alternative to traditional investigations. It is currently the most economical and effective method for lake biodiversity research. Lakes are easier to be enriched DNA owing to static water environment, therefore more suitable for applying eDNA methods to carry out their biodiversity researches. This article reviewed the application of eDNA in studies of the lake biodiversity. We also summarized the related experimental design, and analyzed challenges and prospects of this method. The application of eDNA in the lake biodiversity indicated characters of research objects from low-level organisms to high-level organisms. The samples are mainly water and sediments. By extracting ancient DNA from lake sediments, the lake history and the evolution of biodiversity have been studied; eDNA extracted from water samples can be used to understand the current aquatic biodiversity in the lake. The experimental technology of eDNA includes sampling and preservation, DNA extraction and detection. The three main aspects to determine quality of eDNA samples include suitable amount of samples, sampling methods and storage ways. eDNA can be used to detect specific taxa or multi-taxa based on PCR/qPCR with specific primer or meta-barcoding technology. The application of eDNA in lake biodiversity faces challenges such as lack of optimal experimental protocols, contamination, errors and imperfect taxa DNA database. In the future, the application of eDNA method needs to improve relevant experimental techniques and develop DNA database to solve the corresponding dilemmas. We recommend that human contamination and cross-contamination between samples should be avoided as much as possible during sampling. For the lack of database, we suggest establishing a regional eDNA database, conducting targeted data management and strengthening data sharing among various laboratories.