AbstractThe Three‐River Headwater Region, also known as China's water tower, is highly sensitive to climate change and has experienced profound hydrological alterations in the last few decades. This study assessed the potential impacts of climate change on all the important hydrological components such as precipitation, evapotranspiration, streamflow, snow‐melt flow, and soil moisture (SM) content in the region. For this, climate data (i.e., temperature, precipitation, relative humidity, and windspeed) of three Global Climate Models (i.e., CanESM5, MPI‐ESM1.2‐HR, and NorESM2‐MM) was downscaled with the Statistical DownScaling Model (SDSM) and their ensemble was forced into a hydrological model to simulate the hydrological processes for 1981–2100. The screening process, which is central to all downscaling techniques, is very subjective in the SDSM. Therefore, we developed a quantitative screening approach by modifying the method applied by Mahmood and Babel (2013, https://doi.org/10.1007/s00704‐012‐0765‐0) for the selection of a set of logical predictors to cope with multi‐collinearity and their ranking. The analyses were performed for the near future period (NFP, 2021–2060) and far future period (FFP, 2061–2100) relative to the baseline period (BLP, 1981–2020). The results showed that the region will be hotter and wetter in the future, with intensive and frequent floods. For example, temperature, precipitation, evapotranspiration, and streamflow will increase by 1.0–1.5 (1–1.9)°C, 9–21 (15–27)%, 6–17 (9–29)%, and 9–46 (22–64)% in the NFP and by 2.0–2.8 (2.7–4.6)°C, 16–40 (43–87)%, 11–31 (24–73)%, and 20–95 (60–198)% in the FFP, respectively, under SSP2‐4.5 (SSP5‐8.5). Similar projections were explored for other hydrological components. Among all, surface flow showed an unprecedented increase (500%–1,000%) in the FFP. Peak flows will be much higher and will shift forward, and snowmelt will start earlier in the future. The results of the present study can be a good source for understanding the hydrological cycle and be used for the planning and management of water resources of the highly elevated and complex region of the Qinghai Tibetan Plateau.