The Katla caldera is located under the Mýrdalsjökull ice cap and is one of the most hazardous volcanoes in Iceland due to major jökulhlaups that accompany eruptions. Subglacial geothermal activity is manifested in several 10–50m deep depressions (ice cauldrons) within and at the caldera rim and the total geothermal heat output is of the order of a few hundred megawatts. A short-lived but powerful pulse in geothermal heat output took place in 1999, probably including a minor subglacial eruption, when new ice cauldrons formed in three places and an unexpected jökulhlaup occurred. Following these events, a comprehensive monitoring program was set up for Katla, including ice surface elevation profiling from aircraft, to monitor variations in geothermal heat and detect signs of subglacial water accumulation. A radar altimeter coupled with a kinematic GPS is used, achieving an absolute elevation accuracy of 3m and internal consistency of 1–2 m. Profiles across the caldera are flown twice a year. An annual accumulation-ablation cycle in surface elevation with amplitude of 5–10m is observed. By removing this cycle from the data, changes due to subglacial geothermal activity are obtained. After the events in 1999, a decline in geothermal activity was observed. In 2001–03 some ice cauldrons expanded and deepened by 10–15 m, indicating renewed increase in geothermal activity. This trend is also apparent for 2003–05. The increase in geothermal power amounts to a few tens of megawatts. It is likely that the increased thermal output is related to increased seismicity and caused by magma inflow.