Based on experiments of periphyte response to different trophic levels and their impact on macrophyte production, it was found that the periphyte biomass increased with the nutrient concentrations. Increased trophic level and periphyte biomass resulted in decreased macrophyte photosynthesis. It was suggested that the periphytes could cause resilience and hysteresis in the system shifts between macrophyte and phytoplankton domination. Other factors, such as fish farming, storm induced waves and mechanical destruction, and high water levels could be the perturbations during the system shifts, but these are not the key factors. Instead, the nutrient loading and periphyte abundance could determine the shift in lake ecosystem between macrophyte and phytoplankton domination. This finding could theoretically elucidate the mechanism of ecosystem shifts between macrophyte and phytoplankton domination.