Glacial lake outburst floods (GLOFs) are sudden, and often hazardous, floods occurring upon the failure of a glacial lake dam or moraine. A GLOF occurred at Sulzenau Lake (Tyrol, Austria) in August 2017 due to a partial moraine and dam failure, damaging nearby infrastructure. Due to the ongoing retreat of Sulzenau Glacier, the areal extent, depth, water volume, and shoreline configuration of Sulzenau Lake fluctuate over both short‐ and long‐term periods. Here, we used remote sensing data to create a detailed geomorphological overview of the valley, analyse the lake's evolution since 2009, and characterize the conditions leading to the 2017 dam failure. Using optical remote sensing imagery, we generated detailed pre‐ and post‐event geomorphological maps of Sulzenau Lake and areas impacted by the GLOF to characterize erosional and depositional zones. We employed the Normalized Difference Water Index (NDWI) and mapped the post‐event boulder distribution. Based on multi‐temporal mapping, we calculated water volumes, analysed changes in lake and glacier surfaces since 1970, and compared them with ERA‐5 meteorological data. Lake growth was primarily due to rising temperatures and glacier retreat. In 2017, both precipitation and air temperatures in the Sulzenau Valley exceeded the 1991–2021 averages, with precipitation 14.8% higher and air temperatures 0.35°C above the 30‐year mean. Ice velocities for Sulzenau Glacier reached 170 m/year during 2015–2022. By modelling flow conditions required for observed boulder movements during the GLOF, we constrained the peak discharge to 150–200 m3/s. No significant pre‐2017 GLOF activity or meteorological anomalies were detected. Accordingly, we attribute the GLOF and dam failure to an increased meltwater flux and increased precipitation, possibly augmented by subglacial/englacial lake drainage. The 2017 Sulzenau Valley GLOF is a pertinent example of environmental changes and associated hazards in high‐mountain glacial environments due to global warming.