Using five ice core data sets combined into a single time series, we provide for the first time strong observational evidence for two distinct time scales of Arctic temperature fluctuation that are interpreted as variability associated with the Atlantic Multidecadal Oscillation (AMO). The dominant and the only statistically significant multidecadal signal has a time scale of about 20 years. The longer multidecadal variability of 45–85 years is not well defined and none of the time scales in this band is statistically significant. We compare these observed temperature fluctuations with results of coupled climate model simulations (HadCM3 and GFDL CM2.1). Both the 20–25 year and a variable longer AMO time scale are prominent in the models' long control runs. This periodicity supports our conjecture that the observed ice core fluctuations are a signature of the AMO. The robustness of this short time scale period in both observations and model simulations has implications for understanding the dominant AMO mechanisms in climate.