The regional coupled atmosphere-ice-ocean model HIRHAM-MOM has been developed to simulate the Arctic climate. The model has been applied for the year 1990, which was characterized by anomalous ice retreat along the eastern Arctic coasts. Many observed features of the anomalous atmospheric circulation and sea ice concentration pattern during spring to early summer are reproduced by the model. It was even able to generate the extreme summer sea ice conditions in the Eurasian Arctic and the associated high surface air temperatures. The model shows less success in simulating the large ice retreat in the Siberian Arctic in late summer. This is explained mainly by deviations in the simulated atmospheric circulations. Results from an ocean-ice-alone model confirm that the atmospheric forcing dominates the simulated ice retreat. On the other hand, a sensitivity study with the atmosphere-alone model shows the impact of the sea ice conditions on the atmospheric circulation. Only with the accurate satellite-derived sea ice data is the model able to reproduce the anomalous late summer atmospheric pressure patterns.