A fine-resolution (1/10°) ocean/sea ice model configured in the Community Earth System Model framework is compared with observations and studied to determine the basin-scale and local balances controlling the variability of sea ice anomalies from the mean seasonal cycle in the Bering Sea for the time period 1980–1989. The model produces variations in total Bering Sea ice area anomalies that are highly correlated with observations. Surface air temperature, which is specified from reanalysis atmospheric forcing, strongly controls the ice volume variability in this simulation. The thermodynamic ice volume change is dominated by surface energy flux via atmosphere-ice sensible heat flux, except near the southern ice edge where it is largely controlled by ocean-ice heat flux. While thermodynamic processes dominate the variations in ice volume in the Bering Sea on the large scale, dynamic processes are important on the local scale near ice margins (both oceanic and land), where dynamic and thermodynamic ice volume changes have opposite signs and nearly cancel each other. Ice motion is generally consistent with winds driving the flow, except near certain straits in the north where ice motion largely follows ocean currents. Two key climate events, strong ice growth with cold air temperature and northerly wind anomalies in February 1984 and weak ice growth with warm air temperature and southerly wind anomalies in February 1989, are studied here in detail. While the processes controlling the ice changes are generally similar to those in other years, these large events help reveal the characteristic spatial patterns of ice growth/melt and transport anomalies.