During SHEBA, thin ice and freshening of the Arctic Ocean surface in the Beaufort Sea led to speculation that perennial sea ice was disappearing [McPhee et al., 1998>. Since 1987, we have collected salinity, Δ18O and Ba profiles near the initial SHEBA site and, in 1997, we ran a section out to SHEBA. Resolving fresh water into runoff and ice melt, we found a large background of Mackenzie River water with exceptional amounts in 1997 explaining much of the freshening at SHEBA. Ice melt went through a dramatic 4--6 m jump in the early 1990s coinciding with the atmospheric pressure field and sea-ice circulation becoming more cyclonic. The increase in sea-ice melt appears to be a thermal and mechanical response to a circulation regime shift. Should atmospheric circulation revert to the more anticyclonic mode, ice conditions can also be expected to revert although not necessarily to previous conditions. ¿ 1999 American Geophysical Union