The design and construction of dams are risky in karst regions with active tectonic settings and strong heterogeneity due to their leakage potential. Hydrogeological characterization by karst-specific methods can be used to reduce the risk of improper dam construction. Numerous karstic dams have been constructed in the world in simple tectonic settings. In this study, a combination of geological and hydrogeological investigations is used with extensive data collection to evaluate the leakage potential of the Abolabbas Dam construction project at the Malagha karst aquifer, a tectonized highland karst region in the southwest of Iran. Two thrust faults which bounded the Malagha karst aquifer (overthrusting) caused extensive crushed zones, continuous lengths with high permeabilities in most of the boreholes, extensive open joints, and small-size solution cavities. The results of artificial tracer tests imply that the flow regime is diffuse. The flat water table, diffuse flow regime, extensive crushed zones, and continuous high-permeabilities most probably imply that the groundwater flows through an extensive network of joints without main conduits to drain the system. Despite a diffuse flow regime, an extensive grout curtain both in length and depth is required to prevent leakage because the loose materials of the crushed zones will be washed out without it under high hydraulic gradients after dam impoundment. The impermeable formation is too deep due to overthrusting. Therefore, a huge leakage may occur under the hanging grout curtain. The results allow a clearer understanding of the location and properties of fracture zones, erodible materials, high permeability zones, groundwater flow regime, and zones of preferential flow which are essential for reducing the failure of dam construction in such environments. Overall, it is demonstrated that integrating different complementary methods can help to minimize the uncertainties inherent in engineering problems in similar karst scarce-data regions.