Lake Ziway is one of the largest freshwater lakes located in the central Ethiopian rift valley. The lake shoreline is dominated by macrophytes which play an important role in immobilizing run-off pollution, stabilize sediments and support biodiversity. Monitoring the spatio-temporal changes of great lakes requires standardized methods. The aim of this study was to assess the current and long-term trends of macrophyte distribution, surface water area and the water level of Lake Ziway using remote sensing images from 1986 to 2016 with additional hydro-meteorological data. A supervised image classification with classification enhancement using Normalized Difference Aquatic Vegetation Index (NDAVI) and Normalized Difference Vegetation Index (NDVI) was applied. The classification based on NDAVI revealed eight target classes which were identified with an overall producer’s accuracy of 79.6%. Contemporary open water and macrophyte fringes occupied most of the study area with a total area of 407.4 km2 and 60.1 km2, respectively. The findings also revealed a regime shift in the mean water level of the lake and a decline in macrophyte distribution. The long-term water surface area of Lake Ziway also decreased between 1986 and 2016. The changes in water level could be explained by climate variability in the region and strong anthropogenic disturbance. A decline in water level was also associated with lowered surface water area, lakeward retreated macrophyte fringes and enhanced landward encroachment of mudflats, and resulted in a succession of macrophytes with semi-terrestrial vegetations.