Impact of sea-ice concentration (SIC) on the Arctic atmospheric boundary layer (ABL) is investigated using a polar-optimized version of the Weather Research and Forecasting (Polar WRF) model forced with SIC conditions during three different years. We present a detailed comparison of the simulations with historical ship and ice station based data focusing on September. Our analysis shows that Polar WRF provides a reasonable representation of the observed ABL evolution provided that SIC uncertainties are small. Lower skill is obtained, however, with elevated SIC uncertainties associated with incorrect seasonal evolution of sea ice and misrepresentation of ice thickness near the marginal ice zone (MIZ). The result underscores the importance of accurate representation of ice conditions for skillful simulation of the Arctic ABL. Further, two dynamically distinctive effects of sea ice on the surface wind were found, which act on different spatial scales. Reduced SIC lowers ABL stability, thereby increasing surface-wind (W10) speeds. The spatial scale of this response is comparable to the basin scale of the SIC difference. In contrast, near-surface geostrophic wind (Wg) shows a strong response in the MIZ, where a good spatial correspondence exists among the Laplacian of the sea level pressure (SLP), the surface-wind convergence, and the vertical motion within the ABL. This indicates that SIC affects Wg through variation in SLP but on a much narrower scale. Larger-amplitude and broader-scale response in W10 implies that surface-wind stress derived from Wg to drive ice-ocean models may not fully reflect the effect of SIC changes.