In an introductory section we review the physical processes influencing the formation and evolution of melt ponds on sea ice during the Arctic summer. As melt progresses, the changing properties of the surface interact strongly with the surface heat balance. The small interannual variability of the seasonal ice extent suggests an interannual variability of the surface heat balance of ¿1 W m-2 or less. The interannual variance of atmospheric forcing represented by the transport of moist static energy into the Arctic is an order of magnitude greater. This appears to contradict the notion of a highly sensitive sea ice cover and emphasizes the need to generate albedo as an important internal variable in interactive models. Observations of melt ponds are needed in order to derive improved relationships between surface albedo and parameters such as the amount of snow, the onset and termination of melting, the ice thickness distribution, and ice deformation. Here classified (National Technical Means) imagery is used to measure melt pond coverage as it evolves over a summer on ice surrounding a drifting buoy. Local variability of pond cover is greatest at the beginning of the melt season, that is, pond coverage from 5% to 50% depending on ice type, as previously found by Russian investigators. An important distinction is found in the temporal change of pond cover: it decreases with time on thick ice, and it increases with time on thin ice (eventually leading to the disappearance of thin ice at the end of summer). An attempt to relate pond coverage to ice concentrations derived from passive microwave data proved unsuccessful. ¿ 1998 American Geophysical Union