Over the period of modern satellite observations, Arctic sea-ice extent at the end of the melt season (September) has declined at a rate of >11% per decade, and there is evidence that the rate of decline has accelerated during the last decade. While climate models project further decreases in sea- ice mass and extent through the 21st century, the model ensemble mean trend over the period of instrumental records is smaller than observed. Possible reasons for the apparent discrepancy between observations and model simulations include observational uncertainties, vigorous unforced climate variability in the high latitudes, and limitations and shortcomings of the models stemming in particular from gaps in understanding physical process. The economic significance of a seasonally sea-ice-free future Arctic, the increased connectivity of a warmer Arctic with changes in global climate, and large uncertainties in magnitude and timing of these impacts make the problem of rapid sea-ice loss in the Arctic a grand challenge of climate science. Meaningful prediction/projection of the Arctic sea-ice conditions for the coming decades and beyond requires determining priorities for observations and model development, evaluation of the ability of climate models to reproduce the observed sea-ice behavior as a part of the broader climate system, improved attribution of the causes of Arctic sea-ice change, and improved understanding of the predictability of sea-ice conditions on seasonal through centennial timescales in the wider context of the polar climate predictability.