Sea ice leads (quasi-linear cracks or openings within the polar ice pack that are open water or thin, recently frozen ice) play an important role in the Arctic boundary layer as they promote the turbulent flux exchanges from the warm exposed water to the cold atmosphere, thereby affecting the boundary layer cloudiness. In this presentation, our goal is to investigate how Arctic sea ice leads affect low-level clouds in the wintertime and why it is. We first use diverse surface- and satellite-based observations to establish statistical associations between large-scale lead fraction and low-level cloud occurrence over a peripheral sea north of Barrow, Alaska. Current understanding suggests that high concentrations of leads are associated with more low-level clouds. However, we find just the opposite. We then further extend our study region to the entire Pan-Arctic and examine this lead-cloud relationship in a longer time period and find consistent results. Motivated by these observational results, we use a 3D cloud-resolving model (SAM) to explore the underlying physical processes. We find that newly frozen leads with large sensible heat fluxes, but small latent heat fluxes, create a dry and convective boundary layer and tend to dissipates low-level clouds, which provides a plausible explanation for the counterintuitive observational results. This work provides a foundation for a deeper understanding of the lead modulation of low-level cloud and the associated influence on surface energy balance in a changing Arctic climate.