The importance of waves in the Arctic Ocean has increased with the significant retreat of the seasonal sea-ice extent. Here, we use wind, wave, turbulence, and ice measurements to evaluate the response of the ocean surface to a given wind stress within the marginal ice zone, with a focus on the local wind input to waves and subsequent ocean surface turbulence. Observations are from the Beaufort Sea in the summer and early fall of 2014, with fractional ice cover of up to 50%. Observations showed strong damping and scattering of short waves, which, in turn, decreased the wind energy input to waves. Near-surface turbulent dissipation rates were also greatly reduced in partial ice cover. The reductions in waves and turbulence were balanced, suggesting that a wind-wave equilibrium is maintained in the marginal ice zone, though at levels much less than in open water. These results suggest that air-sea interactions are suppressed in the marginal ice zone relative to open ocean conditions at a given wind forcing, and this suppression may act as a feedback mechanism in expanding a persistent marginal ice zone throughout the Arctic.