Paleoseismological investigations, brittle fault analysis, and paleostrain calculations combined with the interpretation of satellite imagery and flood wave modeling were used to investigate the seismic and associated glacial hazard potential in Eastern Lunana, a remote area in NW Bhutan. Seismically induced liquefaction features, cracked pebbles, and a surface rupture of about 6.8 km length constrain the occurrence of M ≥ 6 earthquakes within this high-altitude periglacial environment, which are the strongest earthquakes ever been reported for the Kingdom of Bhutan. Seismicity occurs along conjugate sets of faults trending NE-SW to NNW-SSE by strike-slip and normal faulting mechanism indicating E-W extension and N-S shortening. The strain field for these conjugate sets of active faults is consistent with widespread observations of young E-W expansion throughout southern Tibet and the north Himalaya. We expect, however, that N-S trending active strike-slip faults may even reach much farther to the south, at least into southern Bhutan. Numerous glacial lakes exist in the investigation area, and today more than 100 ¿ 106 m3 of water are stored in moraine-dammed and supraglacial lakes which are crosscut by active faults. Strong earthquakes may trigger glacial lake outburst floods, and the impact of such flash floods may be worst 80 km downstream where the valley is broad and densely populated. Consequently, tectonic models of active deformation have to be closely linked with glacial hazard evaluation and require rethinking and modification.