Groundwater plays a significant role in glacial hydrology and can buffer changes to the timing and magnitude of flows in meltwater rivers. However, proglacial aquifer characteristics or groundwater dynamics in glacial catchments are rarely studied directly. We provide direct evidence of proglacial groundwater storage, and quantify multi-year groundwater-meltwater dynamics, through detailed aquifer characterisation and intensive high-resolution monitoring of the proglacial system of a rapidly retreating glacier, Virkisjökull, in south-eastern Iceland. Proglacial unconsolidated glaciofluvial sediments comprise a highly permeable aquifer (25-40md<span classCombining double low line"inline-formula">-1) in which groundwater flow in the shallowest 20-40m of the aquifer is equivalent to 4.5% (2.6%-5.8%) of mean river flow, and 9.7% (5.8%-12.3%) of winter flow. Estimated annual groundwater flow through the entire aquifer thickness is 10% (4%-22%) the magnitude of annual river flow. Groundwater in the aquifer is actively recharged by glacier meltwater and local precipitation, both rainfall and snowmelt, and strongly influenced by individual precipitation events. Local precipitation represents the highest proportion of recharge across the aquifer. However, significant glacial meltwater influence on groundwater within the aquifer occurs in a 50-500m river zone within which there are complex groundwater-river exchanges. Stable isotopes, groundwater dynamics and temperature data demonstrate active recharge from river losses, especially in the summer melt season, with more than 25% and often <50% of groundwater in the near-river aquifer zone sourced from glacier meltwater. Proglacial aquifers such as these are common globally, and future changes in glacier coverage and precipitation are likely to increase the significance of groundwater storage within them. The scale of proglacial groundwater flow and storage has important implications for measuring meltwater flux, for predicting future river flows, and for providing strategic water supplies in de-glaciating catchments.