Arctic coastal margins receive organic material input from rivers, melted sea ice, and coastal erosion, phenomena that are all undergoing changes related to global climate. The optical properties of coastal Arctic waters contain information on this organic material, and we examined three optical properties of seawater (absorption, backscatter, and fluorescence) for their relationships to variability in dissolved and particulate organic carbon (DOC and POC) in Stefansson Sound, Alaska, a coastal Arctic embayment. During open water periods in 2018 and 2019, DOC was inversely correlated with salinity (r2 = 0.97) and positively correlated with dissolved organic matter fluorescence (fDOM; r2 = 0.67). DOC showed strong correlation with the nonparticulate absorption coefficient at 440 nm (ag(440)) only in 2018 (r2 = 0.95). The vertical structure of fDOM in Stefansson Sound aligned with density profiles more strongly in 2018 than in 2019, and higher levels of fDOM, ag(440), and backscatter seen near the bottom in 2019 suggest wind‐driven mixing and/or bottom resuspension events. In both years, DOC correlated strongly with the spectral slope of the absorption coefficient between 412 and 550 nm (r2 = 0.70), and POC was well correlated with spectral backscattering at 470, 532, and 660 nm (r2 = 0.90, 0.71, and 0.59). These interannual differences in the spatial and vertical distributions of DOC and POC, and their respective correlations with optical proxies, likely reflect regional climatological factors such as precipitation over the adjacent watersheds, wind patterns, and residual sea ice in late summer.