Outburst floods from ice‐marginal lakes are poised to become more prevalent in a warming climate. As glaciers thin and tributaries detach, water can be impounded in these unstable lakes at valley confluences. To characterize the role of the little‐studied englacial hydrological system during an outburst flood cycle, we deployed a variety of geophysical and hydrometeorological instruments in and around an ice‐marginal lake dammed by the Kaskawulsh Glacier, Yukon, Canada, to capture its 2017 filling and drainage. The subaerial lake reached a maximum volume of 9.9
±0.5×106 m
3 on 17 August before draining over the course of
∼19 days. During lake filling, abrupt changes in ice shelf uplift rates are associated with the formation of faults and fractures. These hydromechanical interactions are closely linked to a redistribution of englacial water as evidenced by fluctuations in shallow borehole water pressures, and changes in radar internal reflection power. Water balance calculations reveal that the subaerial, subglacial, and englacial reservoirs respectively store 20 (17–23)%, 40 (25–50)%, and 40 (30–60)% of water in the catchment at peak lake level. The calculated englacial storage volume implies saturated porosities up to 4–10% locally or 2–4% catchment‐wide. The englacial system is therefore both volumetrically important and influenced by the hydromechanical interactions between the lake and glacier. Its spatial extent and storage capacity may play a role in lake drainage initiation, modulation of the flood hydrograph, and lake refilling.