The impacts of increased open water in the Beaufort Sea were investigated for a summer Arctic storm in 2008 using a coupled atmosphere-ice-ocean model. The storm originated in northern Siberia and slowly moved into the Beaufort Sea along the ice edge in late July. The maximum wind associated with the storm occurred when it was located over the open water near the Beaufort Sea coast, after it had moved over the Chukchi and Beaufort Seas. The coupled model system is shown to simulate the storm track, intensity, maximum wind speed and the ice cover well. The model simulations suggest that the lack of ice cover in the Beaufort Sea during the 2008 storm results in increased local surface wind and surface air temperature, compared to enhanced ice cover extents such as occurred in past decades. In addition, due to this increase of open water, the surface latent and sensible heat fluxes into the atmosphere are significantly increased. However, there were no significant impacts on the storm track. The expanded open water and the loss of the sea ice results in increases in the surface air temperature by as much as 8°C. Although the atmospheric warming mostly occurs in the boundary layer, there is increased atmospheric boundary turbulence and downward kinetic energy transport that reach to mid-levels of the troposphere and beyond. These changes result in enhanced surface winds, by as much as ∼4 m/s during the 2008 storm, compared to higher ice concentration conditions (typical of past decades). The dominant sea surface temperature response to the storm occurs over open water; storm-generated mixing in the upper ocean results in sea surface cooling of up to 2°C along the southern Beaufort Sea coastal waters. The Ekman divergence associated with the storm caused a decrease in the fresh water content in the central Beaufort Sea by about 11 cm.