Supraglacial Imja Lake (lake level, 5010 m a.m.s.l.), Khumbu, Nepal Himalaya, has increased its size on the tongue of Imja Glacier since the 1950s. In order to clarify the mechanism of the lake expansion, the physical conditions, water budget and heat budget of the lake were examined by measuring water temperature, water turbidity, lake level, meteorology and water discharge. These measurements were carried out in the monsoon season of July 1997, when the glacier melt occurred in the ablation area with air temperature of more than 0°C. Density stratification in the lake is built up by an effect of water pressure on lake water, but, neglecting the effect, lake water density is defined by suspended sediment concentration rather than temperature. Glacier-melt water from the subaqueous part of the glacier terminus mixed with lake surface water of 4–8°C, and diffused the water of about 3°C into the deeper zone of the lake. This advective, thermal diffusion occurs by sediment-laden underflow and relatively clear density interflow. The sediment-laden underflow is induced by intermittent glacier-melt sediment discharge at the terminus, while the density interflow is probably produced by continuous glacier-melt water discharge. Calculation of water budget of the lake indicates that meltwater inflow at the glacier terminus and surface water outflow at the outlet determine the hydrological conditions of the lake. The net heat transfer by melting of the terminal ice and dead ice, connected to the lake expansion, was evaluated by calculating the heat budget of the lake.