The Arctic is a complex and integral part of the Earth system, influencing the global surface energy and moisture budgets, atmospheric and oceanic circulations, and geosphere-biosphere feedback. Some key influences are linked to the recent changes in the multiyear sea ice cover and the ocean. The ice cover is particularly important because it buffers air-sea heat fluxes and through ice-albedo feedback strongly influences Earth’s absorption of solar radiation, especially by the ocean. Global warming has been most visibly manifested in the Arctic through a declining perennial sea ice cover, which has intensified during the late 1990s and the 2000s, resulting in record minima ice cover in 2007 and in 2012. This talk will provide an overview of the recent states and variability of the Arctic Ocean. We will focus on physical changes of potential relevance to the Arctic acoustics, including the past and present climatological changes, evolution of the upper ocean stratification and water masses, mesoscale processes, including eddies, mixing, coastal and boundary currents, and their linkages to the changing regime of the sea ice cover from multi-year to first-year sea ice. Finally, the latest advancements and outstanding challenges in modeling and prediction of arctic climate change will be discussed.