AbstractWe introduce the Lake Urmia Vignette (LUV) as a tool to assess individuals' understanding of complexity in socio‐environmental systems. LUV is based on a real‐world case and includes a short vignette describing an environmental catastrophe involving a lake. Over a few decades, significant issues have manifested themselves at the lake because of various social, political, economic, and environmental factors. We design a rubric for assessing responses to a prompt. A pilot test with a sample of 30 engineering graduate students is conducted. We compare responses to LUV with other measures. Our findings suggest that students' understanding of complexity is positively associated with their understanding of systems concepts such as feedback loops but not with other possible variables such as self‐reported systems thinking skills or systems‐related coursework. Based on the provided instructions, researchers can use LUV as a novel assessment tool to examine understanding of complexity in socio‐environmental systems.© 2020 System Dynamics Society