We examined the behavior of the sea ice in the Okhotsk Sea which formed over the deep Kuril Basin during the period 1978–82. When ice extended over the basin, we observed the formation of large eddies with diameters of order 200 km. We determined the size and duration of these eddies through use of the 37 GHz channel on the Nimbus 7 Scanning Multichannel Microwave Radiometer, and with the visible channel on the geostationary Himawari satellite. Within the ice cover, the satellite data show that these eddies produced open-water regions which persisted for 4–6 weeks, and that the eddies recurred year after year, even though their relative position changed. Comparison of eddy positions determined from satellite data with oceanographic positions shows that the oceanography drives the eddies. An estimate of heat loss from these eddies shows that the role of the ocean eddies is to keep the region ice-free until heat loss approaches zero, so that fluxes over the eddies primarily cool the water column without adding salt. Then as the atmosphere begins to warm in spring, the eddies tend to become ice-covered, so that melt water is introduced to their surface. Examination of the oceanography shows that the early summer water-column structure depends on the heat loss from the region during the preceding ice season, the amount of ice over the basin, and the total amount of ice formation in the Okhotsk Sea. During the heavy ice year of 1979, the upper 200–300 m were cooler, less saline, and highly oxygenated. This modification appears to be a local process, driven by eddy-induced mixing, local cooling, and ice melting. At 300–1200 m depths, water modification is caused by advection of water from outside the Kuril Basin. During heavy ice years with strong cooling, this water is more saline, colder, and richer in oxygen than during lighter ice years. The water modified in the basin can be traced into the North Pacific, where it cools and dilutes the surface water, and oxygenates the upper 200–400 m.