Recent surveys of floating ice shelves associated with Pine Island Glacier (Antarctica) and Petermann Glacier (Greenland) indicate that there are channels incised upward into their bottoms that may serve as the conduits of meltwater outflow from the sub-ice-shelf cavity. The formation of the channels, their evolution over time, and their impact on ice-shelf flow are investigated using a fully-coupled ice-shelf/sub-ice-shelf ocean model. The model simulations suggest that channels may form spontaneously in response to meltwater plume flow initiated at the grounding line if there are relatively high melt rates and if there is transverse to ice-flow variability in ice-shelf thickness. Typical channels formed in the simulations have a width of about 1–3 km and a vertical relief of about 100–200 m. Melt rates and sea-water transport in the channels are significantly higher than on the smooth flat ice bottom between the channels. The melt channels develop through melting, deformation, and advection with ice-shelf flow. Simulations suggest that both steady state and cyclic state solutions are possible depending on conditions along the lateral ice-shelf boundaries. This peculiar dynamics of the system has strong implications on the interpretation of observations. The richness of channel morphology and evolution seen in this study suggests that further observations and theoretical analysis are imperative for understanding ice-shelf behavior in warm oceanic conditions.