The Severnaya Dvina River valley crosses the former south‐eastern margin of the last Scandinavian Ice Sheet. Despite a long research history, there remains considerable controversy about the maximum ice‐sheet extent and the expansion of proglacial lakes within the Severnaya Dvina fluvial system. The goal of this study was to address these issues using new material from the valleys of the Severnaya Dvina and the lower Vychegda, thereby contributing to an understanding of the history of the south‐eastern sector of the last Scandinavian Ice Sheet and its periglacial areas. We studied a number of geological sections using radiocarbon and optically stimulated luminescence (OSL) dating, pollen and carpological analyses, and found that the Last Glacial Maximum (LGM) proglacial lake occupied the Severnaya Dvina valley between 20–19 ka and about 15.5 ka. The lake was localized within the proglacial isostatic depression and occupied only the Severnaya Dvina valley extending no further than the confluence of the Vychegda River, no more than 110 km from the edge of the ice sheet. The lake formation did not cause any drainage reorganization within and outside the Vychegda fluvial system. Given the small size of the lake and presence of the oldest OSL ages along the entire length of the former lake, we suggest that the onset of the proglacial lake marks the maximum extent of the ice sheet in the area. Consequently, the onset of the local LGM may be dated to 20–19 ka, somewhat earlier than assumed by most previous researchers. The LGM ice sheet boundary was located in the Severnaya Dvina valley downstream from the Vychegda confluence and did not extend into the Vychegda valley, despite previous suggestions. During deglaciation, the lake disappearance together with crustal rebound caused an incision episode in the Vychegda – Severnaya Dvina system and the formation of the Lateglacial alluvial terrace with relative height rising downstream due to the uneven rates of the postglacial uplift.