The material-point method (MPM) is a numerical method for continuum mechanics that combines the best aspects of Lagrangian and Eulerian discretizations. The material points provide a Lagrangian description of the ice that models convection naturally. Thus properties such as ice thickness and compactness are computed in a Lagrangian frame and do not suffer from errors associated with Eulerian advection schemes, such as artificial diffusion, dispersion, or oscillations near discontinuities. This desirable property is illustrated by solving transport of ice in uniform, rotational and convergent velocity fields. Moreover, the ice geometry is represented by unconnected material points rather than a grid. This representation facilitates modeling the large deformations observed in the Arctic, as well as localized deformation along leads, and admits a sharp representation of the ice edge. MPM also easily allows the use of any ice constitutive model. The versatility of MPM is demonstrated by using two constitutive models for simulations of wind-driven ice. The first model is a standard viscous-plastic model with two thickness categories. The MPM solution to the viscous-plastic model agrees with previously published results using finite elements. The second model is a new elastic-decohesive model that explicitly represents leads. The model includes a mechanism to initiate leads, and to predict their orientation and width. The elastic-decohesion model can provide similar overall deformation as the viscous-plastic model; however, explicit regions of opening and shear are predicted. Furthermore, the efficiency of MPM with the elastic-decohesive model is competitive with the current best methods for sea ice dynamics.