1. Observed and predicted declines in Arctic sea ice have raised concerns about marine mammals. In May 2008, the US Fish and Wildlife Service listed polar bears (Ursus maritimus) - one of the most ice-dependent marine mammals - as threatened under the US Endangered Species Act. 2. We evaluated the effects of sea ice conditions on vital rates (survival and breeding probabilities) for polar bears in the southern Beaufort Sea. Although sea ice declines in this and other regions of the polar basin have been among the greatest in the Arctic, to date population-level effects of sea ice loss on polar bears have only been identified in western Hudson Bay, near the southern limit of the species' range. 3. We estimated vital rates using multistate capture-recapture models that classified individuals by sex, age and reproductive category. We used multimodel inference to evaluate a range of statistical models, all of which were structurally based on the polar bear life cycle. We estimated parameters by model averaging, and developed a parametric bootstrap procedure to quantify parameter uncertainty. 4. In the most supported models, polar bear survival declined with an increasing number of days per year that waters over the continental shelf were ice free. In 2001-2003, the ice-free period was relatively short (mean 101 days) and adult female survival was high (0.96-0.99, depending on reproductive state). In 2004 and 2005, the ice-free period was longer (mean 135 days) and adult female survival was low (0.73-0.79, depending on reproductive state). Breeding rates and cub litter survival also declined with increasing duration of the ice-free period. Confidence intervals on vital rate estimates were wide. 5. The effects of sea ice loss on polar bears in the southern Beaufort Sea may apply to polar bear populations in other portions of the polar basin that have similar sea ice dynamics and have experienced similar, or more severe, sea ice declines. Our findings therefore are relevant to the extinction risk facing approximately one-third of the world's polar bears.