The current coarse‐resolution global Community Earth System Model (CESM) can reproduce major and large‐scale patterns but is still missing some key biogeochemical features in the Arctic Ocean, e.g., low surface nutrients in the Canada Basin. We incorporated the CESM Version 1 ocean biogeochemical code into the Regional Arctic System Model (RASM) and coupled it with a sea‐ice algal module to investigate model limitations. Four ice‐ocean hindcast cases are compared with various observations: two in a global 1° (40∼60 km in the Arctic) grid: G1deg and G1deg‐OLD with/without new sea‐ice processes incorporated; two on RASM's 1/12° (∼9 km) grid R9km and R9km‐NB with/without a subgrid scale brine rejection parameterization which improves ocean vertical mixing under sea ice. Higher‐resolution and new sea‐ice processes contributed to lower model errors in sea‐ice extent, ice thickness, and ice algae. In the Bering Sea shelf, only higher resolution contributed to lower model errors in salinity, nitrate (NO3), and chlorophyll‐a (Chl‐a). In the Arctic Basin, model errors in mixed layer depth (MLD) were reduced 36% by brine rejection parameterization, 20% by new sea‐ice processes, and 6% by higher resolution. The NO3 concentration biases were caused by both MLD bias and coarse resolution, because of excessive horizontal mixing of high NO3 from the Chukchi Sea into the Canada Basin in coarse resolution models. R9km showed improvements over G1deg on NO3, but not on Chl‐a, likely due to light limitation under snow and ice cover in the Arctic Basin.