The termini of Icelandic glaciers are highly dynamic environments. Pronounced changes in frontal ablation in recent years have consequently changed ice dynamics. In this study, we reveal the inter‐seasonal dynamics of the Kvíárjökull ablation zone and proglacial zone using ArcticDEM and Sentinel‐2 images acquired between 2011 and 2021 and intra‐seasonal dynamics with repeated UAV surveys during summer 2021. Average glacier surface velocity in the ablation zone ranged from 51 m year−1 in 2015 up to 199 m year−1 in 2018, with maxima within the axial zone of the glacier and minima on the glacier edges. Coincidentally, and in accordance with glacier retreat/advance, the ice‐marginal proglacial lake fluctuated in its area, and we interpret that it was also a key factor in the development of the glacier terminus morphology. A complex spatial pattern of glacier surface elevation changes, including thickening in the frontal true left margin of the terminus, is interpreted to be due to variable subglacial topography, relatively fast ice flow from the accumulation zone and an insulating effect of glacier surface debris cover. In contrast, the true right (southern) part of the glacier terminus experienced thinning and retreat/disintegration also during the 2021 summer season, which we attribute to enhanced frontal ablation connected to the intrusion of lake water into the crevassed glacier terminus. Overall, this study suggests that where glaciers are developing ice‐marginal lakes complex patterns of glacier dynamics and mass loss can be expected, which will confound understanding of the short‐term evolution of these environments.