Better understanding of deglacial meltwater pulses (MWPs) is imperative for future predictions of human-induced warming and abrupt sea-level change because of their potential for catastrophic damage. However, our knowledge of the second largest meltwater pulse MWP-1B that occurred shortly after the start of the Holocene interglacial remains very limited. Here, we studied fossil ostracods as paleoenvironmental indicators of water depth, salinity, and temperature in two marine sediment cores from Storfjorden, Svalbard margin (the Arctic Ocean), to investigate near-field (i.e. areas located beneath continental ice sheets at the Last Glacial Maximum) evidence of MWP-1B. The depositional environment changed from a cold bathyal environment to a warmer bathyal environment at ∼11,300 yr BP indicating incursion of warm Atlantic water into the Nordic seas, and eventually to a cold neritic environment by ∼11,000 yr BP because of melting of the Svalbard-Barents Sea ice sheet and resultant isostatic rebound. This process corresponds to rapid relative sea-level fall of 40–80 m of MWP-1B from ∼11,300 to 11,000 yr BP.