We incorporate a top soil organic layer in the land-surface scheme of the regional climate model HIRHAM and discuss its implications for Arctic climate simulations. This inclusion modifies not only the ground thermal and hydrological regimes, but also dynamically feeds back into the atmosphere. The top organic layer reduces ground temperatures by 0.5°C to 8°C. Increased summer ground evaporation causes a significant drop in 2m air temperatures. Furthermore, the dynamical response due to heat flux changes affects the large-scale atmospheric circulation. In winter, the mean sea level pressure is reduced over the Barents- and Kara Seas which is an improvement compared to observations. Copyright 2008 by the American Geophysical Union.