The Arctic Ocean is undergoing rapid transformation toward a seasonally ice-free ecosystem. As ice-adapted apex predators, polar bears (Ursus maritimus) are challenged to cope with ongoing habitat degradation and changes in their prey base driven by food-web response to climate warming. Knowledge of polar bear response to environmental change is necessary to understand ecosystem dynamics and inform conservation decisions. In the southern Beaufort Sea (SBS) of Alaska and western Canada, sea ice extent has declined since satellite observations began in 1979 and available evidence suggests that the carrying capacity of the SBS for polar bears has trended lower for nearly two decades. In this study, we investigated the population dynamics of polar bears in Alaska's SBS from 2001 to 2016 using a multistate Cormack–Jolly–Seber mark–recapture model. States were defined as geographic regions, and we used location data from mark–recapture observations and satellite-telemetered bears to model transitions between states and thereby explain heterogeneity in recapture probabilities. Our results corroborate prior findings that the SBS subpopulation experienced low survival from 2003 to 2006. Survival improved modestly from 2006 to 2008 and afterward rebounded to comparatively high levels for the remainder of the study, except in 2012. Abundance moved in concert with survival throughout the study period, declining substantially from 2003 and 2006 and afterward fluctuating with lower variation around an average of 565 bears (95% Bayesian credible interval [340, 920]) through 2015. Even though abundance was comparatively stable and without sustained trend from 2006 to 2015, polar bears in the Alaska SBS were less abundant over that period than at any time since passage of the U.S. Marine Mammal Protection Act. The potential for recovery is likely limited by the degree of habitat degradation the subpopulation has experienced, and future reductions in carrying capacity are expected given current projections for continued climate warming.