Given the recent increased attention towards "tipping points" in understanding the effects of climate change, it is vital to comprehend Arctic sea ice variability over the past twenty-one thousand years before the present (ka). Here, we have analyzed a quasi-continuous coupled general circulation model (CGCM) simulation to gain further insight into how the Arctic sea ice coverage (SIC) (ocean surface covered with more than 5% sea ice concentration) spatially responds to changes in orbital, greenhouse gas, meltwater, and continental ice sheet forcings over the past 21 ka. We found that the annual mean Arctic SIC predominantly varied in the Atlantic Ocean sector, particularly during the Heinrich 1 (H1; ∼19–17 ka) and Younger Dryas (YD; ∼12.9–11.3 ka) cold events and Bølling–Allerød (BA; 17–14.35 ka) warm periods. By altering the poleward oceanic heat transport into the Arctic, a weakened (strengthened) AMOC resulted in the expansion (reduction) of Arctic SIC. Meanwhile, we observed a two-way relationship between the AMOC and Arctic SIC with an out-of-phase (in-phase) relationship when AMOC leads (lags) Arctic SIC by 20 years (4 ka). Subsequently, we observed a sea ice-capping mechanism wherein an increase (decrease) in Atlantic SIC during H1/YD (BA) reduces (increases) net ocean surface heat flux and deep convection, thereby influencing the AMOC strength. Furthermore, it was found that the SPG and AMOC strengths have been in-phase throughout the past 21 ka, except during the abrupt termination and input of freshwater flux during the BA and Meltwater Pulse 1A (∼14.4–13.9 ka) events, respectively. Recent studies have observed increased Greenland ice sheet melting and precipitation in the Arctic, which would increase the influx of freshwater into the Arctic Ocean. Meanwhile, our paleoclimate study suggests that a sudden change in freshwater discharge into the subpolar North Atlantic may alter the polar ocean dynamics, which may help in understanding near-future Arctic conditions.