We report on satellite and ground-based observations that link glacier motion with subglacial hydrology beneath Skeiðarárjökull, an outlet glacier of Vatnajökull, Iceland. We have developed a technique that uses interferometric synthetic aperture radar (InSAR) data, from the European Remote-sensing Satellite (ERS-1/-2) tandem mission (1995–2000), to detect localized anomalies in vertical ice motion. Applying this technique we identify an area of the glacier where these anomalies are frequent: above the subglacial course of the river Skeiðará, where we observed uplift of 0.15–0.20 m d−1 during a rainstorm and a jökulhlaup, and subsidence at a slower rate subsequent to rainstorms. A similar pattern of motion is apparent from continuous GPS measurements obtained at this location in 2006/07. We argue that transient uplift of the ice surface is caused by water accumulating at the glacier base upstream of an adverse bed slope where the overburden pressure decreases significantly over a short distance. Most of the frictional energy of the flowing water is therefore needed to maintain water temperature at the pressure-melting point. Hence, little energy is available to enlarge water channels sufficiently by melting to accommodate sudden influxes of water to the base. This causes water pressure to exceed the overburden pressure, enabling uplift to occur.