Climate model projections of future climate change exhibit a robust increase in Arctic precipitation, which invokes an array of climate effects. Idealized climate model simulations with artificially increased Arctic precipitation rates exhibit cooling of near-surface atmospheric temperatures and sea ice expansion. We show here that this cooling cannot be attributed to increased surface albedo from fresh snow and less absorption of solar radiation by sea ice, but rather to a reduction in upward oceanic heat flux. This reduction in heat flux is due to increased precipitation that leads to fresher ocean surface waters and, hence, to more stable stratification of the upper Arctic Ocean. This stratification results in cooling of the ocean surface and warming of deeper ocean layers. The simulations show that sea ice expansion and surface cooling peak in the Barents Sea, a region that is very sensitive to changes in mixed layer depth, which decreases considerably there. In the context of a warming Arctic, with concurrent 50% increases in precipitation in 2100, this negative feedback is estimated to slow down projected RCP8.5 Arctic warming by up to 2.0°C in winter and sea ice retreat by a maximum of 11% in autumn, although seasonal variations are considerable.