Decadal variability in Caspian Sea thermohaline properties is investigated using a high-resolution ocean general circulation model including sea ice thermodynamics and air-sea interaction forced by prescribed realistic atmospheric conditions and riverine runoff. The model describes synoptic, seasonal and climatic variations of sea thermohaline structure, water balance, and sea level. A reconstruction experiment was conducted for the period of 1961-2001, covering a major regime shift in the global climate during 1976-1978, which allowed for an investigation of the Caspian Sea response to such significant episodes of climate variability. The model reproduced sea level evolution reasonably well despite the fact that many factors (such as possible seabed changes and insufficiently explored underground water infiltration) were not taken into account in the numerical reconstruction. This supports the hypothesis relating rapid Caspian Sea level rise in 1978-1995 with global climate change, which caused variation in local atmospheric conditions and riverine discharge reflected in the external forcing data used, as is shown in the paper. Other effects of the climatic shift are investigated, including a decrease in salinity in the active layer, strengthening of its stratification and corresponding diminishing of convection. It is also demonstrated that water exchange between the three Caspian basins (northern, middle and southern) plays a crucial role in the formation of their thermohaline regime. The reconstructed long-term trends in seawater salinity (general downtrend after 1978), temperature (overall increase) and density (general downtrend) are studied, including an assessment of the influence of main surface circulation patterns and model error accumulation.