We present a field‐data rich modelling analysis to reconstruct the climatic forcing, glacier response, and runoff generation from a high‐elevation catchment in central Chile over the period 2000–2015 to provide insights into the differing contributions of debris‐covered and debris‐free glaciers under current and future changing climatic conditions. Model simulations with the physically based glacio‐hydrological model TOPKAPI‐ETH reveal a period of neutral or slightly positive mass balance between 2000 and 2010, followed by a transition to increasingly large annual mass losses, associated with a recent mega drought. Mass losses commence earlier, and are more severe, for a heavily debris‐covered glacier, most likely due to its strong dependence on snow avalanche accumulation, which has declined in recent years. Catchment runoff shows a marked decreasing trend over the study period, but with high interannual variability directly linked to winter snow accumulation, and high contribution from ice melt in dry periods and drought conditions. The study demonstrates the importance of incorporating local‐scale processes such as snow avalanche accumulation and spatially variable debris thickness, in understanding the responses of different glacier types to climate change. We highlight the increased dependency of runoff from high Andean catchments on the diminishing resource of glacier ice during dry years.