Small glaciers are more sensitive to climate change and can drive remarkable runoff variation in local catchments. Here, the recent shrinkage and hydrological response of Urumqi Glacier No.1, a typical continental glacier, situated in the arid region of northwest China, were investigated using glacier data, hydrological and meteorological data collected near the glacier during the past 50 years. The results showed that annual air temperature and precipitation increased by 0·9 °C and 91 mm (17.5%), respectively. Glacier length shortened by about 215·2 m (9·7%) and its area diminished by 0·304 km2 (15·6%). The cumulative mass balance of the glacier was −13 693 mm, equivalent to 15·2 m of glacier ice. Annual glacier runoff calculated by using a water balance model and the runoff measured at the outflow gauging station increased remarkably. The percentage of the increased river flow being derived from the increased glacier runoff reached 69·7% especially after 1994. Temperature and precipitation during the ablation season were the governing factors affecting the runoff at the glacierized (Glacier No.1) and non-glacierized (Empty Cirque) catchments, respectively. Temperature rise and precipitation increase between 1959 and 2008 have had a combined effect on glacier mass loss and runoff change. Copyright © 2012 John Wiley & Sons, Ltd.