Satellite images show the existence of a recurrent polynya directly over and in the vicinity of Kashevarov Bank. Our modeling results using a coupled ice-ocean model show that tides are important in the establishment and maintenance of this polynya. Ice appears and grows in areas surrounding the bank, while over the bank, tidal mixing transports heat to the sea surface, resulting in ice melt and polynya formation. The strong cooling of the upper sea layer forms a 100--200 m thick surface layer with negative temperatures. The large current amplitudes of the basic tidal waves K1 and O1 generate through nonlinear interactions a clockwise residual current and ice drift as well as secondary oscillations in the semidiurnal, fortnightly, and other tidal bands. In general, ice causes an amplification of the tidal currents and density-driven components of the residual circulation over Kashevarov Bank while the barotropic component of the residual flow is weakened because of the underice boundary layer. ¿ 2000 American Geophysical Union