It is important to have qualitative as well as quantitative understanding of the hydraulic exchange between lake and groundwater for effective water resource management. Dal, a famous urban fresh water lake, plays a fundamental role in social, cultural and economic dynamics of the Kashmir Valley. In this paper geochemical, isotopic and hydrological mass balance approaches are used to constrain the lake water–groundwater interaction of Dal Lake and to identify the sources of lake water. Water samples of precipitation (n = 27), lake water (n = 18) and groundwater (n = 32) were collected across the lake and its catchment for the analysis of δ18O and δ2H. A total of 444 lake water samples and 440 groundwater samples (springs, tube wells and dug wells) were collected for the analysis of Ca2+, Mg2+, HCO3−, SO42−, Cl−, NO3−, Na+ and K+. Water table and lake water level were monitored at 40 observation locations in the catchment. Water table map including pH and EC values corroborate and verify the gaining nature of the Dal Lake. Stable isotopes of lake water in Boddal and Gagribal basins showed more deviation from the global meteoric water line than Hazratbal and Nigeen basins, indicating the evaporation of lake water. The isotopic and geochemical mass balance suggested that groundwater contributes a significant proportion (23–40%) to Dal Lake. The estimated average groundwater contribution to Dal Lake ranged from 31.2 × 103 to 674 × 103 m3 day−1 with an average of 276 × 103 m3 day−1. The study will be useful to delineate the possible sources of nutrients and pollutants entering the lake and for the management of lake water resources for sustainable development.