Low-level mixed-phase stratus occurs throughout the year over the Arctic Ocean and exerts a significant influence on the surface radiative fluxes. Climate and weather prediction models often have difficulty simulating the observed prevalence of mixed-phase clouds, leading to poor representation of the surface energy budget. To address these concerns, a new microphysics scheme has been developed and implemented into the polar version of the Fifth-Generation NCAR/PSU Mesoscale Model (MM5). The new scheme predicts the number concentrations and mixing ratios of cloud droplets, ice, snow, and rain, and includes detailed treatments of ice nucleation and droplet activation from a prescribed distribution of aerosol. It is used to simulate a mixed-phase boundary-layer stratus observed on 4 - 5 May, 1998 during the SHEBA and FIRE-ACE field projects. Results are compared with in-situ observations and ground-based retrievals. The model is able to reasonably predict the observed microphysical and radiative properties of the cloud. Parallel simulations are also performed using other microphysics parameterizations available in MM5. Improvements in the predicted cloud structure are evident using the new microphysics scheme, although the other cloud schemes are particularly sensitive to the specified ice nuclei concentration. These improvements significantly reduce biases in the surface radiative fluxes and produce a more realistic representation of the surface energy budget.