Optimizing the functions and services provided by the mountain cryosphere will maximize its benefits and minimize the negative impacts experienced by the populations that live and work in the cryosphere-fed regions. The high sensitivity of the mountain cryosphere to climate change highlights the importance of evaluating cryospheric changes and any cascading effects if we are to achieve regional sustainable development goals (SDGs). The southern Altai Mountains (SAM), which are located in the arid to semi-arid region of central Asia, are vulnerable to ecological and environmental changes as well as to developing economic activities in northern Xinjiang, China. Furthermore, cryospheric melting in the SAM serves as a major water resource for northeastern Kazakhstan. Here, we systematically investigate historical cryospheric changes and possible trends in the SAM and also discover the opportunities and challenges on regional water resources management arising from these changes. The warming climate and increased solid precipitation have led to inconsistent trends in the mountain cryosphere. For example, mountain glaciers, seasonally frozen ground (SFG), and river ice have followed significant shrinkage trends as evidenced by the accelerated glacier melt, shallowed freezing depth of SFG, and thinned river ice with shorter durations, respectively. In contrast, snow accumulation has increased during the cold season, but the duration of snow cover has remained stable because of the earlier onset of spring melting. The consequently earlier melt has changed the timing of surface runoff and water availability. Greater interannual fluctuations in snow cover have led to more frequent transitions between snow cover hazards (snowstorm and snowmelt flooding) and snow droughts, which pose challenges to hydropower, agriculture, aquatic life, the tail-end lake environment, fisheries, and transboundary water resource management. Increasing the reservoir capacity to regulate interannual water availability and decrease the risk associated with hydrological hazards related to extreme snowmelt may be an important supplement to the regulation and supply of cryospheric functions in a warmer climate.