This model‐based study assesses the response of the lower atmosphere and near‐surface permafrost on the North Slope of Alaska to projections in sea ice decline. The Weather Research and Forecast model, with polar optimization (polar WRF), was configured for the North Slope of Alaska and the adjacent Arctic Ocean and run for two decade‐long control periods, the 1970s and the 2040s. Community Earth System Model output was used to drive the polar WRF model. By swapping the sea ice coverage in the control cases, two polar WRF sensitivity experiments were designed to quantify the changes in the low atmosphere and near‐surface permafrost in response to projected declines in sea ice extent. The strongest impacts of sea ice decline occur primarily during the late fall and early winter. These include increases in surface air temperature, surface humidity, total cloud cover, and precipitation amount. Future impacts of sea ice decline are projected to become weaker over time in the late fall and early winter while becoming more prominent in late spring and early summer. Projected sea ice decline also inhibits low‐level cloud formation in summer as a result of destabilization of the boundary layer. Sensitivity experiments by polar WRF and Geophysical Institute Permafrost Laboratory model, respectively, suggest that sea ice decline explains approximately 20% of both the atmospheric and permafrost warmings on a mean annual basis compared to the overall projected warming under the RCP4.5 scenario.