The HBV model was applied to simulate the runoff of the Glacier No. 1 at the Headwaters of the Urumqi River, while the degree-day model was used to calculate ice and snow melt. Using measured hydro-meteorological data during 1980-2006 and five glacier area topographic maps as the model input, the daily runoff of the watershed were simulated. Also, it is emphatically analyzed how the degree-day factor and glacier area fluctuation impact the glacial meltwater runoff. The results show that the adjusted degree-day factor and glacier area are able to make the simulation results greatly improved, which proved the model itself being highly sensitive to the degree-day factor. In a long time scale, simulation of glacier runoff and mass balance should update glacier area annually, as a variable in order to improve the simulation accuracy. Based on the above considerations, the runoff and soil evaporation are simulated from1980 to 2006. Based on the principle of water balance, the mass balance and glacier ice volume sequences in the watershed are calculated, while the simulation results of the model are compared and validated. It is found that glacier area change would affect the runoff simulation for a longer time scale, and should not be ignored. It would make the simulated runoff larger than the actual one if the glacier area is a constant. The average error due to glacier are change is about 7% in the past 26 years for the Glacier No.1 at the headwaters of the Urumqi River.