As sea ice extent decreases in the Arctic, surface ocean waves have more time and space to develop and grow, exposing the Marginal Ice Zone (MIZ) to more frequent and energetic wave events. Waves can fragment the ice cover over tens of kilometres, with the potential to strongly affect sea ice dynamics in the MIZ. To assess this impact—which remains largely unknown—we have developed a coupled wave-ice model framework, combining the spectral wave model WAVEWATCH III with the sea ice model neXtSIM. This model allows us to represent the effects of wave-induced fragmentation on sea ice mobility. We find this effect to be significant when waves propagate far enough to break thick and compact ice, which occurs regularly in the Barents and Greenland Seas. Our results indicate that wave impact on sea ice primarily depends on the distance over which waves can break the ice—that is, the MIZ extent—which remains poorly constrained due to limited observations. However, this constraint may soon be alleviated thanks to new MIZ retrieval products derived from satellite altimeters likes ICESat-2, along with the increasing deployment of affordable wave buoys in the Arctic Ocean. Leveraging these observations, we assess our model’s ability to capture the evolution of the MIZ extent. The model performs reasonably well, enabling us to investigate MIZ variability and trends related to wave activity over the past three decades. We find that the evolution of the wave-affected MIZ contrasts with the MIZ extent derived from sea ice concentration thresholds, showing a clear increasing trend in most seasons—seemingly driven by increased fetch.