AbstractGlacier retreat results in the formation and expansion, and sometimes outburst, of moraine‐dammed lakes worldwide. Sudden outburst floods from such lakes have caused enormous damage to settlements and infrastructure located downstream. Such lakes located in the Himalayan region are highly prone to outburst floods due to climatic conditions and geotectonic settings. In this study, multi‐temporal Landsat images from 2002–2014, digital elevation models (DEMs), geomorphic analysis and modelling were used to assess the changes in glacial lakes and the outburst susceptibility of moraine‐dammed lakes in the Chandra–Bhaga basin of the north‐western Indian Himalaya. An inventory of lakes was developed using satellite data, thematic maps and ground‐based investigations for the Chandra–Bhaga basin. The total area of all glacial lakes (size >5000 m2) increased by 47% from 2002 to 2014, with a pronounced increase of 57% for moraine‐dammed lakes. Sixteen moraine‐dammed lakes were identified and assessed for outburst susceptibility using the analytic hierarchy process (AHP). Forty‐one reported glacial lake outburst flood (GLOF) events from moraine‐dammed lakes in Himalayan regions were analysed, culminating in the identification of 11 critical factors for assessing outburst susceptibility using the AHP, including those related to the lake area and change, surrounding terrain characteristics, dam geometry, regional seismicity and rainfall history. The past three GLOF events in the Himalayan region were used to validate the method and to classify moraine‐dammed lakes as having very high, high, medium or low outburst susceptibility. Eight lakes classified as very high and high outburst susceptibility should be further investigated in detail. The proposed AHP‐based approach is suitable for first‐order identification of critical lakes for prioritising future detailed investigation and monitoring of moraine‐dammed glacial lakes in the Himalayan region. Copyright © 2017 John Wiley & Sons, Ltd.