Ecosystems that are in equilibrium provide vital resources to local inhabitants, including protection from naturally occurring disasters. Natural vegetation cover has been optimized over many years to retain a maximum of rainfall-runoff by increasing the field capacity of the soil cover, securing water availability during droughts and reducing the flood risk during heavy precipitation events. In this presentation, we will present new results from an assessment of the ecosystem restoration effects on the runoff dynamics of rainfall water in Rangárvellir, an area in southern Iceland. The Rangárvellir area consists of three watersheds, containing a rain-fed river (Ytri-Rangá), a glacial river (Eystri-Rangá), and a groundwater-fed river (Hroásslækur). Dramatic deforestation during the last millennium and year-round livestock grazing along with devastating ash depositions during volcanic eruptions and a harsh sub-polar oceanic climate have led to severe degradation in Rangárvellir. Since the beginning of the 20th-century diverse restoration, measures have been implemented making Rangárvellir an ideal case study to investigate the effects of restoration on hydro-meteorological risk reduction. Additionally, in 2008 extensive forestation projects were initiated. To investigate the effect of restoration on the occurrence of flood and drought events we analyzed time series of discharge observations in the three rivers. For this purpose, the frequency and intensity of flood peaks in Eystri-Rangá and Ytri-Rangá were assessed during the years 1997–2015. A comparison with precipitation data reveals a significant underground flow through the numerous lava fields in the region. Complementary discharge observations in Hroásslækur confirm the intense water flow through local lava fields. The scientific findings and conclusion of this project will generate valuable insights into the effects of land restoration on hydro-meteorological risk reduction. The presentations will outline the main methods used during the project and conclude by providing an outlook on the expected results.