Australia’s arid interior was once home to a much more diverse range of environments, including several large lakes from which fossils have been discovered. Here, we examine the palaeoecology of a fossil dolphin from the Upper Oligocene (27-23 MYA) Namba Formation of South Australia. This new species is potentially the first known dolphin to inhabit a lake and the earliest known appearance of an obligate freshwater species. To unravel its palaeoecology, we conducted shape, convergence and trace element analyses. 56 cetacean earbones from 53 species were examined for comparative morphological analysis. The results showed similarities in echolocation abilities to smaller extant dolphins and two closely related species, suggesting that it used echolocation to navigate turbid waters. 3D geometric morphometrics of the cochlea revealed that it has evolved convergently with some species of ‘river’ dolphins, leading us to hypothesise this morphology was a trait that facilitated transitioning from marine to freshwater environments. Analysis of trace elements within the fossil, including Barium and Strontium, confirms a freshwater environment, and places the dolphin in the lake’s highest trophic level. Overall, our results display this dolphin species invaded freshwater environments earlier than previously discovered and is the first known in a lacustrine setting.