Combining 3‐D inversion of high‐resolution aeromagnetic data with airborne hyperspectral imaging creates a new method to map buried structure and hydrothermal alteration, applied to Mt. Ruapehu volcano, New Zealand. Hyperspectral imaging is sensitive to surface mineralogy including alteration minerals, while magnetic vector inversion reveals the volumetric distribution of magnetic susceptibility from which we interpret buried geology. Probability assessment from multiple model regularizations provides an important model uncertainty estimate. At Ruapehu, hyperspectral imaging highlights two main regions of surface alteration: the Pinnacle Ridge and the southeast flanks. The magnetic model of Pinnacle Ridge shows that alteration seen at surface continues to depth, but strongly magnetic, unaltered dikes form the core of the ridge. On the southeast flanks, the magnetic model also shows alteration imaged on the surface continues to depth; however, a previously unknown, magnetized sill intrudes part of the flank. Several smaller demagnetized regions are modeled, unlike at neighboring Mt. Tongariro where the hydrothermal system created a large demagnetized core. We propose that these differences relate to spatially focused (Ruapehu) vs distributed (Tongariro) eruption vents, the degree of faulting of the edifice and its glaciation history. Lava‐ice interaction produces fine‐grained lavas with measured magnetic susceptibilities similar to some moderately altered lavas, illustrating that care must be taken in the interpretation of magnetic data in the absence of geological information. The combination of hyperspectral imaging and aeromagnetic data inversion distinguishes shallow surface weathering from deeper‐seated hydrothermally altered rock masses, with implications for the magnitude and probability of collapse events.