The near-surface climate, including the atmosphere, ocean, sea ice, and land state and fluxes, in the initial version of the Regional Arctic System Model (RASM) are presented. The sensitivity of the RASM near-surface climate to changes in atmosphere, ocean, and sea ice parameters and physics is evaluated in four simulations. The near-surface atmospheric circulation is well simulated in all four RASM simulations but biases in surface temperature are caused by biases in downward surface radiative fluxes. Errors in radiative fluxes are due to biases in simulated clouds with different versions of RASM simulating either too much or too little cloud radiative impact over open ocean regions and all versions simulating too little cloud radiative impact over land areas. Cold surface temperature biases in the central Arctic in winter are likely due to too few or too radiatively thin clouds. The precipitation simulated by RASM is sensitive to changes in evaporation that were linked to sea surface temperature biases. Future work will explore changes in model microphysics aimed at minimizing the cloud and radiation biases identified in this work.