Understanding the contributions to Arctic sea level (ASL) variability is critical to understand how the Arctic is reacting to ongoing climate change. Here, we use Ocean Reanalysis System 5 (ORAS5) reanalysis data and tide gauge and satellite altimetry observations to quantify contributions from different physical processes on the ASL variability. The ORAS5 reanalysis shows that the ASL is rising with a trend of 2.5 ± 0.3 mm yr⁻¹ (95% confidence level) over 1979–2018, which can be attributed to four components: (i) the dominant component from the global sea level increase of 1.9 ± 0.5 mm yr⁻¹, explaining 69.7% of the total variance of the ASL time series; (ii) the Arctic Oscillation–induced mass redistribution between the deep central basin and shallow shelves, with no significant trend and explaining 6.3% of the total variance; (iii) the steric sea level increase centering on the Beaufort Gyre region with a trend of 0.5 ± 0.1 mm yr⁻¹ and explaining 29.1% of the total variance of the ASL time series; and (iv) the intrusion of Pacific water into the Arctic Ocean, with no significant trend and contributing 14.2% of the total ASL variability. Furthermore, the dramatic sea ice melting and the larger area of open water changes the impact of the large-scale atmospheric forcing on the ASL variability after 1995, and the ocean dynamic circulation plays a more important role in the ASL variability.