Arctic sea ice thickness has declined rapidly over recent decades, yet the relative roles of thermodynamic growth and dynamic redistribution in driving this change remain poorly constrained at basin scale. We quantify thermodynamic and dynamic contributions to sea-ice thickness change together with their uncertainties across the Arctic from 2002 to 2020 by combining satellite-derived thickness with sea-ice model simulations (Icepack) along trajectories. Separating dynamical thickening (30%), dynamical thinning (−24%), and lead-ice growth (10.2%) shows that dynamic processes contribute nearly as much to the average winter ice growth of 0.21 m per month as thermodynamic processes (35.8%). Regional, seasonal, and thickness-dependent variability is consistent with large-scale dynamic patterns and the ice-growth feedback. We quantify the effects of the overly smooth deformation forcing, which leads to an underestimation of large dynamic events and a substantial noise floor during dynamically quiet periods, and relate their magnitude to other sources of uncertainty. Analyzing the long-term trend from 2002–2020, we resolve a weak increase in median sea ice deformation (1.5% per year) and net dynamic thickness change (12% per year) within the limits of our study setup. Overall, our results suggest that increasing deformation in the Arctic enhances net dynamic thickness change and acts as a negative feedback in the pan-Arctic winter thickness budget.