A multiscale magnetic survey of the northern basin of Yellowstone Lake was undertaken in 2016 as part of the Hydrothermal Dynamics of Yellowstone Lake Project (HD‐YLAKE)—a broad research effort to characterize the cause‐and‐effect relationships between geologic and environmental processes and hydrothermal activity on the lake floor. The magnetic survey includes lake surface, regional aeromagnetic, and near‐bottom autonomous underwater vehicle (AUV) data. The study reveals a strong contrast between the northeastern lake basin, characterized by a regional magnetic low punctuated by stronger local magnetic lows, many of which host hydrothermal vent activity, and the northwestern lake basin with higher‐amplitude magnetic anomalies and no obvious hydrothermal activity or punctuated magnetic lows. The boundary between these two regions is marked by a steep gradient in heat flow and magnetic values, likely reflecting a significant structure within the currently active ~20‐km‐long Eagle Bay‐Lake Hotel fault zone that may be related to the ~2.08‐Ma Huckleberry Ridge caldera rim. Modeling suggests that the broad northeastern magnetic low reflects both a shallower Curie isotherm and widespread hydrothermal activity that has demagnetized the rock. Along the western lake shoreline are sinuous‐shaped, high‐amplitude magnetic anomaly highs, interpreted as lava flow fronts of upper units of the West Thumb rhyolite. The AUV magnetic survey shows decreased magnetization at the periphery of the active Deep Hole hydrothermal vent. We postulate that lower magnetization in the outer zone results from enhanced hydrothermal alteration of rhyolite by hydrothermal condensates while the vapor‐dominated center of the vent is less altered.