Interannual variability of ice cover, circulation, and thermal structure in Lake Erie for 2003–2012 was investigated using a three-dimensional hydrodynamic model coupled with ice processes. The model reproduced minima of ice extent in the winters of 2006 and 2012 (mild winters), as well as maxima in 2009 and 2011 (severe winters) in agreement with the observational analysis. The model reasonably captured ice thicknesses, seasonal variation of the mean surface temperature, and lake circulation. The model results showed early onset of stratification in March after the almost ice-free winter of 2012. In the mild winters, the coastal current speed was significantly higher than the 9 year mean, since the larger open water region due to less ice cover allowed the more effective wind driven circulation. In the severe winters, the lake circulation was slowed because the packed ice reduced wind stress on the water surface. Seasonal means of coastal current speed ranged from 3.9 cm/s in the severe winter (January to March mean) of 2009 to 7.2 cm/s in the mild winter of 2012. The variation was much larger than in the other seasons (±0.6 cm/s). The results imply that decreasing ice cover could lead to a more energetic coastal circulation in winter, which could influence lake turbidity, material transport, and nearshore waves. Finally, the interannual variation of ice cover is discussed in relation to teleconnection patterns. The ice minimum (maximum) in the winter of 2006 (2009) can be explained by the intermittent positive (negative) North Atlantic Oscillation that occurred in January (December to January).