Against the backdrop of Arctic sea ice decline, vertical mixing in the interior Arctic Ocean will most likely change, but it is still unclear how the Arctic Ocean and sea ice will respond. In this paper, a sea ice‐ocean model with a simple parameterization for interior background mixing is used to investigate the Arctic Ocean and sea ice response to a scenario of increased vertical mixing. It is found that more vertical mixing reduces sea ice thickness all year round and decreases summertime sea ice concentration. More vertical mixing leads to a cooling of the Arctic halocline layer and Atlantic Water layer below. The increased vertical mixing speeds up vertical heat and salinity exchange, brings the underlying warm and saline water into the surface layer, and contributes to the sea ice decline. Vertical salinity gradient of the Arctic halocline layer reduces together with a much fresher Atlantic Water layer, and more volume of saline water enters the deep ocean below the Atlantic Water layer. As a result, the reduced Arctic Ocean stratification leads to an adjustment of the circulation pattern. Cyclonic circulation anomalies occur in the surface layer shallower than 20m depth and in the interior ocean deeper than 700m depth, while anticyclonic circulation anomalies occur between these depths. Our study suggests that the extra heat and salinity exchange induced by more vertical mixing will have a noticeable impact on the upper ocean structure, ocean circulation, and sea ice in a changing Arctic Ocean.