Polar bears (PBs) are superbly adapted to the extreme Arctic environment and have become emblematic of the threat to biodiversity from global climate change. Their divergence from the lower-latitude brown bear provides a textbook example of rapid evolution of distinct phenotypes. However, limited mitochondrial and nuclear DNA evidence conflicts in the timing of PB origin as well as placement of the species within versus sister to the brown bear lineage. We gathered extensive genomic sequence data from contemporary polar, brown, and American black bear samples, in addition to a 130,000- to 110,000-y old PB, to examine this problem from a genome-wide perspective. Nuclear DNA markers reflect a species tree consistent with expectation, showing polar and brown bears to be sister species. However, for the enigmatic brown bears native to Alaska's Alexander Archipelago, we estimate that not only their mitochondrial genome, but also 5–10% of their nuclear genome, is most closely related to PBs, indicating ancient admixture between the two species. Explicit admixture analyses are consistent with ancient splits among PBs, brown bears and black bears that were later followed by occasional admixture. We also provide paleodemographic estimates that suggest bear evolution has tracked key climate events, and that PB in particular experienced a prolonged and dramatic decline in its effective population size during the last ca. 500,000 years. We demonstrate that brown bears and PBs have had sufficiently independent evolutionary histories over the last 4–5 million years to leave imprints in the PB nuclear genome that likely are associated with ecological adaptation to the Arctic environment.