Using the shortwave infrared (SWIR) atmospheric correction algorithm with 1640 and 2130 nm bands, water optical property data for China's inland freshwater Lake Taihu have been derived from measurements of the Moderate Resolution Imaging Spectroradiometer (MODIS) on the satellite Aqua. Using MODIS-Aqua measurements from 2002 to 2010, seasonal and spatial distributions of the normalized water-leaving radiance nLw(λ) spectra from visible to the near-infrared (NIR) and SWIR (1240 nm) are derived and used for study and characterization of Lake Taihu water optical properties. In particular, for the first time, spatial and seasonal variations of nLw(λ) at the SWIR 1240 nm (nLw(1240)) are derived for the lake and show some different features from those of the red and NIR nLw(λ) (nLw (645) and nLw (859)). Time series of monthly MODIS-derived nLw(λ) spectra for Lake Taihu are obtained and analyzed, showing important seasonal and interannual variations. The results indicate that the SWIR nLw (1240) contributions in the lake are mainly due to the presence of significant amounts of algae, while the red and NIR nLw(λ) variations result from changes of total suspended sediment (TSS) amounts in the water column. Furthermore, this study shows that all three SWIR bands at 1240, 1640, and 2130 nm are useful and required for satellite water quality remote sensing for extremely turbid near-shore and inland waters.