High northern latitudes exhibit enhanced near-surface warming in a climate with increasing greenhouse gases compared to other parts of the globe, indicating an amplified climate response to external forcing. Decadal to multidecadal variability sometimes enhances and at other times reduces the long-term trends. Therefore, the influence of internal variability should be taken into account when externally forced climate signals are assessed. This thesis contributes to our understanding of Arctic climate projections by clarifying the role of coupled ocean-sea-ice-atmosphere processes on the long-term trends and decadal variability of the Arctic climate system. Important mechanisms linked to the location of the sea ice margin and ocean heat transports into the Arctic have been identified and were shown to have a substantial effect on the Arctic's response to climate change.