A fully prognostic Arctic ice-ocean model is used to study the interannual variability of the sea ice during the period 1955–1975 and to explain the large variability of the ice extent in the Greenland and Iceland seas during the late 1960's. In particular, the model is used to test the conjecture of Aagaard and Carmack (1989) that the Great Salinity Anomaly (GSA) was a consequence of the anomalously large ice export in 1968. The objective here is to explore the high-latitude ice-ocean circulation changes due to wind field changes. In the simulations the ice extent in the Greenland Sea increased during the 1960's, reaching a maximum in 1968, as observed, and maxima in ice extent were always preceded by large pulses of ice export through the Fram Strait. The ice export event of 1968 was the largest in the simulation, being about twice as large as the average and corresponding to 1600 km3 of excess fresh water. The simulated upper water column in the Greenland Sea has a salinity minimum in the fall of 1968, followed by very low winter salinities. The simulations suggest that, besides the above average ice export to the Greenland Sea, there was also fresh water export to support the larger than average ice cover. Three low-salinity anomalies, which are created by the variability in ice production/melt, exited through the Fram Strait in 1963–1965, 1966, and 1967–1969, the later two events being associated with a net freshwater export of about 900 km3.The total simulated freshwater input of 2500 km3 to the Greenland Sea compares well with the estimated total freshwater excess of the GSA of about 2200 km3 as it passed through the Labrador Sea (Dickson et al., 1988). Considering the uncertainties in the model, it is possible that the ice export could account for even larger portion of the freshwater excess. However, the main conclusion is that these model results show the origin of the GSA to be in the Arctic, as suggested by Aagaard and Carmack (1989) and support the view that the Arctic may play an active role in climate change.