Virkisjökull is a rapidly retreating outlet glacier draining the western flanks of Öræfajökull in SE Iceland. Since 2011 there have been continuous measurements of flow in the proglacial meltwater channel and regular campaigns to sample stable isotopes δ2H and δ18O from the river, ice, moraine springs and groundwater. The stable isotopes provide reliable end members for glacial ice and shallow groundwater. Analysis of data from 2011 to 2014 indicates that although ice and snowmelt dominate summer riverflow (mean 5.3–7.9 m3 s−1), significant flow is also observed in winter (mean 1.6–2.4 m3 s−1) due primarily to ongoing glacier icemelt. The stable isotope data demonstrate that the influence of groundwater discharge from moraines and the sandur aquifer increases during winter and forms a small (15–20%) consistent source of baseflow to the river. The similarity of hydrological response across seasons reflects a highly efficient glacial drainage system, which makes use of a series of permanent englacial channels within active and buried ice throughout the year. The study has shown that the development of an efficient year round drainage network within the lower part of the glacier has been coincident with the stagnation and subsequent rapid retreat of the glacier.