The impact of Arctic conventional and satellite observations on regional short‐range weather forecasts is assessed using observing‐system experiments, in which observations are removed (denied) when creating the initial conditions of the forecasts. The experiments are conducted with the AROME‐Arctic regional mesoscale numerical weather prediction system, using as lateral boundary conditions (LBCs) observing‐system experiments performed at the European Centre for Medium‐Range Forecasts (ECMWF) with the global forecasting system. This allows the assessment of the relative impacts of observations on forecast skill through regional data assimilation (DA), through LBCs, and the total impact due to the denial of observations in both the regional and global forecasting systems. The study is conducted during the first and second Special Observing Periods of the Year Of Polar Prediction. The total impact on the upper‐air forecasts is dominated by the impact of observations through their assimilation in the LBCs, while for the winter period the impact on surface fields is dominated by the regional DA. The latter is significant up to 36 hr, while the former impact can last throughout the verified forecast range (48 hr). The use of observations in the LBCs has both significantly positive and significantly negative impacts. In terms of total impact on forecast skill, conventional observations, followed by infrared radiances, have the largest impact on all upper‐air parameters, except for humidity. For upper‐air humidity forecasts, the microwave radiances have the largest impact. In terms of observation impact through regional DA, conventional observations play the largest role for upper‐air temperature and geopotential, microwave for upper‐air humidity, and atmospheric motion vectors and Infrared Atmospheric Sounding Interferometer (IASI) for wind forecast. Regional DA of conventional observations also contributes the most to improvements of surface fields, except for 10‐m winds, for which the microwave temperature‐sensitive radiances are the most important. The relative impact of Arctic observations is assessed through data denial in an observing‐system experiment (OSE) with the AROME‐Arctic regional mesoscale model and accounting for the global OSE as lateral boundary conditions (LBCs). The relative impacts of observations through regional data assimilation (DA, purple), through LBCs where the observations are used only in the LBCs (green), and the total impact, which corresponds to the denial of the observations in both regional and global models (light blue), are computed.