Aircraft observations of the atmospheric boundary layer (ABL) over Arctic sea ice were made during non-stationary conditions of cold-air advection with a cloud edge retreating through the study region. The sea-ice concentration, roughness, and ABL stratification varied in space. In the ABL heat budget, 80% of the Eulerian change in time was explained by cold-air advection and 20% by diabatic heating. With the cloud cover and inflow potential temperature profile prescribed as a function of time, the air temperature and near-surface fluxes of heat and momentum were well simulated by the applied two-dimensional mesoscale model. Model sensitivity tests demonstrated that several factors can be active in generating unstable stratification in the ABL over the Arctic sea ice in March. In this case, the upward sensible heat flux resulted from the combined effect of clouds, leads, and cold-air advection. These three factors interacted non-linearly with each other. From the point of view of ABL temperatures, the lead effect was far less important than the cloud effect, which influenced the temperature profiles via cloud-top radiative cooling and radiative heating of the snow surface. The steady-state simulations demonstrated that under overcast skies the evolution towards a deep, well-mixed ABL may take place through the merging of two mixed layers one related to mostly shear-driven surface mixing and the other to buoyancy-driven top-down mixing due to cloud-top radiative cooling. © Springer 2005.