This study explores the mechanisms behind the rapid shrinkage of Limboto Lake, Gorontalo, Indonesia, using remotely sensed imagery and river outcrop investigation data. The results show that more than 70% of the sedimentation resulting in shrinkage is contributed by riverbank erosion causing rivers to drain into the lake during the period 2003–2017. From geological investigation, it is found that the lowland area to the west of Limboto Lake comprises 1 m of flood sediments, followed by at least 5 m of fine-grained inner bay sediments. Severe riverbank erosion is also observed at many points. Hence, it is concluded that the shrinkage of Limboto Lake resulted from rapid-induced rapid erosion of inner bay sediments formed during plate collision which readily flowed into and were deposited in Limboto Lake; this created a delta, especially on the west side of the lake. Accelerated sedimentation caused by river erosion has led to rapid lake shrinkage. This phenomenon could be typical of the transformation of enclosed seas into lakes by the rapid uplifting movement of land in collision zones.