We present Arctic atmospheric boundary-layer modeling with a regional model COAMPS^TM, for the Surface Heat Budget of the Arctic Ocean (SHEBA) experiment. Model results are compared to soundings, near-surface measurements and forecasts from the ECMWF model. The near-surface temperature is often too high in winter, except in shorter periods when the boundary layer was cloud-capped and well-mixed due to cloud-top cooling. Temperatures are slightly too high also during the summer melt season. Effects are too high boundary-layer moisture and formation of too dense stratocumulus, generating a too deep well-mixed boundary layer with a cold bias at the simulated boundary-layer top. Errors in temperature and therefore moisture are responsible for large errors in heat flux, in particular in solar radiation, by forming these clouds. We conclude that the main problems lie in the surface energy balance and the treatment of the heat conduction through the ice and snow and in how low-level clouds are treated.