A new marginal sea parameterization for the Arctic Ocean has been introduced to allow a better estimate of the exchange of water masses of the Arctic with the adjacent oceans. With this improvement, the simulated Paleo-Atlantic deep-sea circulation indicates a southward transport into the Southern Ocean in agreement with stable carbon isotope reconstructions. The deepwater formation in the North Pacific and Southern Ocean is associated with high productivity. Simulated temperatures predicted from an 8 x CO2 PETM run are significantly lower than recent temperature reconstructions from oxygen isotopes, TEX86, and Mg/Ca data. Thus, simulations with even higher greenhouse gas concentrations may be required to yield a better match with the reconstructed temperatures for the PETM.