This paper examines the possible linkage between the recent reduction in Arctic sea-ice extent and the wintertime Arctic Oscillation (AO)/North Atlantic Oscillation (NAO). Observational analyses using the ERA interim reanalysis and merged Hadley/Optimum Interpolation Sea Surface Temperature data reveal that a reduced (increased) sea-ice area in November leads to more negative (positive) phases of the AO and NAO in early and late winter, respectively. We simulate the atmospheric response to observed sea-ice anomalies using a high-top atmospheric general circulation model (AGCM for Earth Simulator, AFES version 4.1). The results from the simulation reveal that the recent Arctic sea-ice reduction results in cold winters in mid-latitude continental regions, which are linked to an anomalous circulation pattern similar to the negative phase of AO/NAO with an increased frequency of large negative AO events by a factor of over two. Associated with this negative AO/NAO phase, cold air advection from the Arctic to the mid-latitudes increases. We found that the stationary Rossby wave response to the sea-ice reduction in the Barents Sea region induces this anomalous circulation. We also found a positive feedback mechanism resulting from the anomalous meridional circulation that cools the mid-latitudes and warms the Arctic, which adds an extra heating to the Arctic air column equivalent to about 60% of the direct surface heat release from the sea-ice reduction. The results from this high-top model experiment also suggested a critical role of the stratosphere in deepening the tropospheric annular mode and modulation of the NAO in mid to late winter through stratosphere-troposphere coupling.