Abstract. In mountain regions, validation and local correction of gridded precipitation datasets (GPDs) are pre-requisites for glacio-hydrological simulations. However, insufficient observed data and glacial involvement make it a complicated task in glacierized watersheds. To diagnose the potential problems in GPDs from multiple perspectives and provide directions for their correction, a Tri-approach framework, consisting of statistical analysis, physical diagnosis, and practical simulation, is proposed. Truc-Budyko theory is introduced into this framework, which can identify the actual under- or over-estimation of GPDs based on watershed water-energy balance, diagnose their possible causes, and provide directions for local correction. This framework was applied to the glacierized Upper Indus Basin (UIB) for evaluating GPDs, including APHRODITE, CFSR, PGMFD, TRMM, and HAR, against adjusted observed precipitation (OBS), specific runoff, and glacier mass balance over varying periods during 1951–2017. The Spatial Processes in HYdrology (SPHY) model was used to simulate the hydrology and glacier changes (2001–2007). The results suggest that (a) patterns of inter- and intra-annual variations of OBS precipitation were better captured by APHRODITE (CC > 0.6), but it was underestimated (−40 %), (b) UIB was characterized as Leaky catchment based on overestimated CFSR (106 %) and HAR (77 %), indicating positive glacier storage changes (0.37 and 0.21 m w.e. yr⁻¹, respectively). In contrast, UIB was characterized as Gaining watershed for remaining underestimated datasets, indicating negative storage changes (−0.42 to −0.34 m w.e. yr⁻¹). (c) For constant mass balance, the simulated runoff was overestimated in SPHY_CFSR (66 %) and SPHY_HAR (53 %), whereas it was underestimated for SPHY_APHRODITE (−41 %), SPHY_PGMFD (−26 %), and SPHY_TRMM (−33 %). It highlights that evaluated GPDs could not generally meet the requirements of the rational output of glacier mass balance and streamflow concurrently. The physical diagnosis directs local correction based on under- and over-estimation. The practical simulation explores the extent of expected uncertainties in intra/inter-annual characteristics of glacio-hydrology.