AbstractReconstruction of the catastrophic drainage following the Millennium Eruption (ME) of Changbaishan‐Tianchi volcano in 946 ± 20 CE is of great significance, as it contributes to improving the regional maximum flood record and develop rare flood risk analysis. However, limited knowledge exists concerning the failure mode, magnitude, and transport processes of the outburst flooding. In this work, we present a whole system model that describes the paleohydrology of catastrophic drainage using geological records along the downstream valley. The model encompasses the crater lake dynamics, an approximation of the breach erosion process and flood propagation downstream. The boulder competence method was used to constrain by reasonable flow parameters, while mitigating the uncertainty caused by the ambiguous geological paleostage indicators. Paleohydrologic analysis indicates that at least 1 km3 of water was released from the caldera, with the vertical breach erosion rates as high as 34 m/hr. Volcanic activity during the ME II may have directly contributed to triggering of the flood event. The local hydrodynamic response of the downstream riverbed captures the dynamic migration patterns of sediments across spatio‐temporal scales, offering a comprehensive interpretation of the specific scouring surfaces observed in the geological profile. The analysis of simulated inundation boundaries reveals that not all recorded inundations can be attributed to the crater lake outburst event. Reconstructions of megafloods based on downstream constraints on flood stage, velocity and discharge can help to infer and constrain the dynamics of dam failure mechanisms, and also contribute to our understanding of these complex paleohydrologic events.