Sea ice data assimilation can greatly improve forecasts of Arctic sea ice evolution. Many previous sea ice data assimilation studies were conducted without assimilating ocean state variables, even though the sea ice evolution is closely linked to the oceanic conditions, both dynamically and thermodynamically. Based on the method of a localized ensemble error subspace transform Kalman filter, satellite‐retrieved sea ice concentration and sea ice thickness are assimilated into an Arctic sea ice‐ocean model. As a new addition, sea surface temperature (SST) data are also assimilated. The additional assimilation of SST improves not only the simulated ocean temperature in the mixed layer of the ocean substantially but also the accuracy of sea ice edge position, sea ice extent, and sea ice thickness in the marginal sea ice zone. The improvement in the simulated potential temperature in the upper 1,000 m can be attributed to the enhanced vertical convection processes in the regions where the assimilated observational SST is colder than the simulated SST without assimilation. The improvements in the sea ice edge position and sea ice thickness simulations are primarily caused by the SST data assimilation reducing biases in the simulated SST and the associated coupled ocean‐sea ice processes. Our investigation suggests that, due to the complex interaction between the sea ice and ocean, assimilating ocean data should be an indispensable component of numerical polar sea ice forecasting systems.