Future global warming will impact coastal marine ecosystems significantly. These changes are expected to be particularly dramatic in the sub-Arctic and Arctic regions which have experienced similar conditions during warm periods in the past (e.g., Holocene Optimum, mid-Pliocene Warm Period). Palaeo-climatic information from these periods will facilitate our predictions of future climate change. Fossil shells of the bivalve Arctica islandica constitute reliable bio-archives for coastal regions of the North Atlantic over geological time scales. We analysed sub-fossil shells of A. islandica from Svalbard for their potential to reconstruct local palaeoenvironmental conditions. These shells were collected from raised beach deposits in Dicksonfjorden, a branch of Isfjorden on the western coast of Spitsbergen. Radiocarbon dating (14CAMS) confirms that the analysed specimens lived at about 8800 yr BP, i.e., during the Holocene Climate Optimum, which was characterized by summer sea surface temperatures 1-3°C warmer than today. This difference in SST also explains today’s extinction of A. islandica on the Svalbard archipelago, as modern water temperatures fall below its thermal tolerance. Analysis of the growth patterns revealed ontogenetic ages of up to 90 years for individual specimens. In addition, the shell growth patterns yield evidence of significant decadal oscillations within the Holocene Climate Optimum in the Arctic. The excellent state of preservation of these shells has been confirmed using Raman microscopy. Since all the sub-fossil shells have been preserved remarkably well, it was considered appropriate to conduct stable oxygen and carbon isotope (δ18O & δ13C) analysis. Results for δ18O show well-defined seasonal cycles, ranging from 1.6‰ to 4.5‰. Ice-volume corrected δ18O values for seawater have been used to calculate palaeo-water temperatures on a sub-annual scale.