Accurate sea surface height measurements have been extracted from ERS altimeter data in sea ice--covered regions for the first time. The data have been used to construct a mean sea surface of the Arctic Ocean between the latitudes of 60¿N and 81.5¿N based on 4 years of ERS-2 data. An RMS value for the crossover differences of mean sea surface profiles of 4.2 cm was observed in the ice-covered Canada Basin, compared with 3.8 cm in the ice-free Greenland-Iceland-Norwegian Seas. Comparisons are made with an existing global mean sea surface (OSUMSS95), highlighting significant differences between the two surfaces in permanently ice-covered seas. In addition, we present the first altimeter-derived sea surface height variability map of the Arctic Ocean. Comparisons with a high-resolution coupled ocean--sea ice general circulation model reveal a good qualitative agreement in the spatial distribution of variability. Quantitatively, we found that the observed variability was on average a factor of 3--4 greater than model predictions.