A high-resolution marine sediment core NP16-Kro1-MCB from Krossfjorden, Western Svalbard is studied to investigate changes in sea surface conditions in the fjord during the last 60 years (1953–2014). The diatom-based reconstruction of August sea surface temperature (aSST) demonstrates a clear warming trend of 0.6 °C through the record. As inferred from Marginal Ice Zone (MIZ) diatoms, surface warming occurs in parallel with a decline in sea ice extent (SIE) during recent decades. Factor analysis identified variations in diatom assemblages representing different water masses, showing a dominance of Arctic water diatoms throughout the period and decadal variations in the sea ice assemblage during periods of peak sea ice extent. The strong dominance of Arctic water diatoms along with increasing aSST suggest prolonged open-water conditions and increased sea ice melting in the region throughout the observed period. The reconstructed ocean surface changes are in line with the background warming occurring over the Arctic region. A comparison with instrumental records from neighboring regions supports the quality of the reconstructions, including the average reconstructed aSST and the magnitude of the warming trend. We suggest that increased CO2 forcing together with ocean–atmospheric interaction have caused the increasing SST trend and decreasing sea ice presence in Krossfjorden rather than an increasing influence from Atlantic Water, which has amplified changes in many regions of Svalbard.