<jats:title>Abstract</jats:title> <jats:p>The freshwater stored in the Arctic Ocean is an important component of the global climate system. Currently the Arctic liquid freshwater content (FWC) has reached a record high since the beginning of the last century. In this study we use numerical simulations to investigate the impact of sea ice decline on the Arctic liquid FWC and its spatial distribution. The global unstructured-mesh ocean general circulation model Finite Element Sea Ice–Ocean Model (FESOM) with 4.5-km horizontal resolution in the Arctic region is applied. The simulations show that sea ice decline increases the FWC by freshening the ocean through sea ice meltwater and modifies upper ocean circulation at the same time. The two effects together significantly increase the freshwater stored in the Amerasian basin and reduce its amount in the Eurasian basin. The salinification of the upper Eurasian basin is mainly caused by the reduction in the proportion of Pacific Water and the increase in that of Atlantic Water (AW). Consequently, the sea ice decline did not significantly contribute to the observed rapid increase in the Arctic total liquid FWC. However, the changes in the Arctic freshwater spatial distribution indicate that the influence of sea ice decline on the ocean environment is remarkable. Sea ice decline increases the amount of Barents Sea branch AW in the upper Arctic Ocean, thus reducing its supply to the deeper Arctic layers. This study suggests that all the dynamical processes sensitive to sea ice decline should be taken into account when understanding and predicting Arctic changes.</jats:p>