Recent satellite lidar measurements of cloud properties spanning a period of 5 years are used to examine a possible connection between Arctic sea ice amount and polar cloud fraction and vertical distribution. We find an anticorrelation between sea ice extent and cloud fraction with maximum cloudiness occurring over areas with little or no sea ice. We also find that over ice-free regions, there is greater low cloud frequency and average optical depth. Most of the optical depth increase is due to the presence of geometrically thicker clouds over water. In addition, our analysis indicates that over the last 5 years, October and March average polar cloud fraction has increased by about 7% and 10%, respectively, as year average sea ice extent has decreased by 5%–7%. The observed cloud changes are likely due to a number of effects including, but not limited to, the observed decrease in sea ice extent and thickness. Increasing cloud amount and changes in vertical distribution and optical properties have the potential to affect the radiative balance of the Arctic region by decreasing both the upwelling terrestrial longwave radiation and the downward shortwave solar radiation. Because longwave radiation dominates in the long polar winter, the overall effect of increasing low cloud cover is likely a warming of the Arctic and thus a positive climate feedback, possibly accelerating the melting of Arctic sea ice.