AbstractThe inherent optical properties (IOPs) of Polar Waters (PW) exiting the Arctic Ocean in the East Greenland Current (EGC) and of the inflowing Atlantic waters (AW) in the West Spitsbergen Current (WSC) were studied in late summer when surface freshening due to sea‐ice melt was widespread. The absorption and attenuation coefficients in PW were significantly higher than previous observations from the western Arctic. High concentrations of colored dissolved organic matter (CDOM) resulted in 50–60% more heat deposition in the upper meters relative to clearest natural waters. This demonstrates the influence of terrigenous organic material inputs on the optical properties of waters in the Eurasian basin. Sea‐ice melt in CDOM‐rich PW decreased CDOM absorption, but an increase in scattering nearly compensated for lower absorption, and total attenuation was nearly identical in the sea‐ice meltwater layer. This suggests a source of scattering material associated with sea‐ice melt, relative to the PW. In the AW, melting sea‐ice forms a stratified surface layer with lower absorption and attenuation, than well‐mixed AW waters in late summer. It is likely that phytoplankton in the surface layer influenced by sea‐ice melt are nutrient limited. The presence of a more transparent surface layer changes the vertical radiant heat absorption profile to greater depths in late summer both in EGC and WSC waters, shifting accumulation of solar heat to greater depths and thus this heat is not directly available for ice melt during periods of stratification.