Global warming causes retreat of ice caps and ice sheets. Can melting glaciers trigger increased volcanic activity? Since 1890 the largest ice cap of Iceland, Vatnajökull, with an area of ∼8000 km2, has been continuously retreating losing about 10% of its mass during last century. Present-day uplift around the ice cap is as high as 25 mm/yr. We evaluate interactions between ongoing glacio-isostasy and current changes to mantle melting and crustal stresses at volcanoes underneath Vatnajökull. The modeling indicates that a substantial volume of new magma, ∼0.014 km3/yr, is produced under Vatnajökull in response to current ice thinning. Ice retreat also induces significant stress changes in the elastic crust that may contribute to high seismicity, unusual focal mechanisms, and unusual magma movements in NW-Vatnajökull.