Thermal and hydrological dynamics and their impacts on the stability of a moraine dam were analyzed and simulated for the Longbasaba Lake in the Himalaya, based on soil temperature, moisture and heat flux data observed at different depths in the dam from 2012 to 2016. Annual average heat income is greater than heat expenditure on the dam surface. The mean annual temperature at observed the depths of 0–150 cm is >0°C, although the average annual air temperature was −3.6°C over the dam, indicating a relatively larger temperature difference between moraine dam and air. The volumetric soil moisture content is relatively low with an annual average of 5%, peaking after the snow cover melting and active layer thawing. Simulation results indicate that the average yearly maximum thawing depth has been ~0.3 m deeper than the average yearly maximum freezing depth during the observation period. In the past 55 years, the yearly maximum thawing depth has increased, while yearly maximum freezing depth has decreased, implying that the permafrost in the dam has been deteriorating. The annual surplus heat and increasing permafrost thawing depth will result in further deterioration of permafrost and melting of buried ice in the dam, thereby decreasing its stability.