Yangcheng Lake Group is composed of Yangcheng Lake and its surrounding smaller lakes such as Kuncheng Lake, Shengze Lake and Kuilei Lake etc., making up dish-like Yangcheng Lake depression topographically. In the paper the environmental changes of the lake area during Neolithic Age and the formation of the lake group are analyzed through the study on the spatial and temporal geographic distribution of the Neolithic sites as well as the depositional features and animal and plant remains in the strata where the relics exist. The study manifests that Majiabang Culture sites of early Neolithic Age are distributed on mound land or hill foot, showing that the ancients settled mostly on higher land. The phenomenon as well as the pollen assemblages and animal remnants in the relic strata indicated a warmer and wetter climate and broader water area. In Songze Culture Period of middle Neolithic Age the intensively fluctuated climate, frequently changed water area exerted a negative effect on the ancients' living and development. Songze sites reduced and distributed only in thg area of Majiabang sites. During Liangzhu Culture Period of late Neolithic Age the climate got dryer and cooler, the land area got broader and the culture sites increased sharply and filled up the space beyond Majiabang and Songze sites. However, an extensive water transgression in the end of Liangzhu Age broke violently the ancient culture and stop the culture development which would enter the historical civilization. Yangcheng Lake together with the surrounding lakes is formed gradually on the basis of the river course during Song Dynasty resulting from the increased water body, disordered water system, blocked river and the overflowed flood.