During the mid-Holocene the eastern Taihu area, on China's Yangtze delta plain, was populated by advanced late Neolithic cultures supported by intensive domesticated rice cultivation. This agricultural system collapsed around 4200 cal yr BP, with severe population decline, the end of the Liangzhu culture, and about half a millennium of very low-scale human activity in the area before the re-establishment of agricultural production. Microfossil analyses from six sedimentary sequences, supported by AMS 14C dating, has allowed reconstruction of mid-Holocene hydrological conditions and salinity changes which would have had a major influence on agricultural viability and cultural history in the coastal wetlands. These data, allied to existing stratigraphic and sea-level records, show that chenier ridges that developed after ca. 7000 cal yr BP in the east of the area sheltered it from marine inundation and although still connected to the sea through tidal creeks, low-salinity conditions persisted throughout the Neolithic period. There is no evidence that marine flooding caused the collapse of Liangzhu culture. Marine influence was stable and evolved slowly. Social and cultural causes may also have been important, but if environmental change triggered the collapse of Neolithic agricultural society here, other natural forces must be sought to explain this event.