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In rapidly urbanizing regions, interconnected lake systems play a critical role. They regulate runoff, store water, and maintain urban hydrological balance. However, their functioning is shaped by anthropogenic interventions and natural characteristics. Lake functioning also exhibits spatial and temporal variability. These challenges are particularly acute in developing cities, especially in tropical regions. Yet, we do not understand how such interconnected human-water coupled systems operate and respond to natural and human influences at different scales. This study investigates how upstream–downstream interactions, temporal changes and human interventions shape lake behavior and function. For this, we used the case study of the cascading lake network of the Hebbal-Nagavara Valley in Bengaluru, India. We developed a hydrological model to simulate runoff and sewage flows across 44 interconnected lakes. The flows were simulated under varying management scenarios. High-resolution observed data at 15-min intervals were used to calibrate the model. Results reveal that upstream lakes are more sensitive to seasonal and catchment-level characteristics. In contrast, downstream lakes are primarily influenced by accumulated upstream flows. Sewage, treated or untreated, is the dominant source. This leads to perennial conditions and reduced variability as the flows accumulate downstream. Thus, both the location within the lake cascade and the own catchment characteristics influence the water quantity in a given lake. These in turn determine whether a lake can function effectively as a flood buffer, ecological site, or storage reservoir. The findings emphasize that lake functions are dynamic and dependent on both catchment characteristics and spatial location within the network. This underscores the need for differentiated, cascade-wide management strategies to enhance urban water security. Through this study, we have developed a diagnostic typology linking lake function to spatial position, inflow type, and temporal changes.