<p>Sea ice retreat is opening up Arctic shipping routes, reducing transit times and enhancing access to regions with valuable resources. However, increased shipping has a negative impact on the Arctic environment. In this Review, we discuss the drivers and impacts of Arctic shipping and outline opportunities for its sustainable development. The Arctic sea ice area in September decreased by 35.8% during 1980–2024; consequently, the number of ships entering the Polar Code Arctic area increased by 37.3% between 2013 and 2023, increasing CO₂ emissions from shipping by 6.3%. Economic incentives, governance frameworks, technology and infrastructure are also key drivers. The impacts of Arctic shipping span multiple environmental spheres, including changes in wildlife behaviour, invasive species, pollution and climate forcing. For example, ship-based emissions contributed to 560–1,100 premature deaths in the Nordic Arctic in 2015; biofouling increases the risk of invasive species by a factor of 3–20; one oil spill caused up to 300,000 bird deaths; and the concentration of microplastics near Brønnøysund is one to four orders of magnitude higher than the global average probably owing to wastewater from ships. Sustainable Arctic shipping will require stricter regulations on fuel standards and greywater release alongside improvements in navigation and emission filtration technologies.</p>