Young Sun-like stars at the beginning of the pre-main-sequence (PMS) evolution are surrounded by accretion discs and remnant protostellar envelopes. Photometric and spectroscopic variations of these stars are driven by interactions of the star with the disc. Time-scales and wavelength dependence of the variability carry information on the physical mechanisms behind these interactions. We conducted multi-epoch, multiwavelength study of PV Cep, a strongly variable, accreting PMS star. By combining our own observations from 2004 to 2010 with archival and literature data, we show that PV Cep started a spectacular fading in 2005, reaching an IC-band amplitude of 4 mag. Analysis of variation of the optical and infrared fluxes, colour indices and emission line fluxes suggests that the photometric decline in 2005-2009 resulted from an interplay between variable accretion and circumstellar extinction: since the central luminosity of the system is dominated by accretion, a modest drop in the accretion rate could induce the drastic restructuring of the inner disc. Dust condensation in the inner disc region might have resulted in the enhancement of the circumstellar extinction.