The evolution of Arctic stratospheric O3 throughout the winter and spring of 2006/2007 is estimated by a state-of-the-art chemical transport model (CTM) and by a 3D-Var assimilation system using O3 data from the Earth Observing System (EOS) Microwave Limb Sounder (MLS) and Solar Backscatter Ultraviolet Radiometer (SBUV/2) satellites. Modelled and assimilated O3 compare well with MLS measurements. The aim of this article is to compare O3 loss estimates derived from the CTM and data-assimilation results, and as a result point to further developments in the method of inferring O3 loss using data assimilation. The methods for inferring O3 loss are discussed and compared with other published methods. The assimilation-system vertical transport is found to be too fast, in agreement with an earlier study, although this affects only the O3 reference field used for the loss estimation. Improving the O3 reference in the assimilation method used here provides a maximum vortex average O3 loss range of 0.8–1.2 ppmv at 68 hPa and 1.0–1.5 ppmv at 46 hPa, peaking at the beginning of March. The corresponding CTM values are 1.4 and 1.6 ppmv, respectively, with the peak lagging the assimilation by a few days at 46 hPa. We show that using a passive tracer as reference for O3 loss does not provide the best estimate for polar stratospheric cloud (PSC)-related loss for this winter; up to 40% of total O3 loss is shown not to be related to PSCs or heterogenous chemistry. Hence, the use of a passive O3 reference for estimating PSC-related O3 loss should be made with care. In addition to the vortex average losses, we estimate an innermost vortex O3 loss of 1.4 ppmv due to PSCs only. Transport effects and differences between the CTM and the assimilation system are discussed, and possible improvements for both models are suggested. Copyright © Royal Meteorological Society and Crown Copyright, 2011