Arctic sea-ice extent (SIE) has declined drastically in recent decades, yet its evolution prior to the satellite era is highly uncertain. Studies using SIE observations find little variability prior to the 1970s; however, these reconstructions are based on limited data, especially prior to the 1950s. We use ensemble Kalman filter data assimilation of surface air temperature observations with Last Millennium climate model simulations to create a fully gridded Arctic sea-ice concentration reconstruction from 1850 to 2018 and investigate the evolution of Arctic SIE during this period. We find a decline of similar to 1.25x10(6) km(2) during the early 20th-century warming (1910-1940). The 25-year trends during this period are similar to 33-38% smaller than the satellite era (1979-2018) but almost twice as large as previous estimates. Additionally, we find that variability of SIE on decadal timescales prior to the satellite era is similar to 40% greater than previously estimated. Plain Language Summary Arctic sea ice is an important part of the climate system, serving as the interface between the ocean-atmosphere system. Arctic sea ice has undergone a rapid decline in recent decades, prompting the question of whether there have been changes of similar magnitude in the past. To answer such questions, a long record of sea ice is necessary, but spatially and temporally complete satellite observations are only available starting in 1979. Previous studies combining sea-ice observations from various sources during the Instrumental Era (1850-2014) found little variability in sea-ice extent prior to the satellite era, but data availability is limited prior to the 1950s. Here, we create an independent estimate of Arctic sea ice from 1850 to 2018 using a data assimilation approach that blends more abundant temperature observations with data from climate models. Our results show substantial loss of sea ice between 1910 and 1940, with a trend that is about similar to 33-38% less than what has been observed in satellite observations. These results reinforce previous findings not only that the current trend is unprecedented in duration since 1850 but also that sea-ice variability prior to 1979 is similar to 40% larger than previously estimated. y