Arctic stratus clouds are not well-simulated by global climate models, yet have a substantial influence on the surface energy budget by interacting strongly with solar and infrared radiation and by modifying lower atmospheric profiles of temperature and humidity. In this paper, Arctic summertime boundary-layer clouds are studied using a 1D model that includes third-moment turbulence closure, a drizzle parameterization, and an interactive radiative transfer scheme. The initial conditions are from the observations of an Arctic summertime boundary layer obtained during 1980 Arctic Stratus Experiment on June 28, 1980. Our simulations under conditions of no large-scale vertical motion contain two layers of clouds: a stable fog layer near the surface and a stratus cloud in an elevated mixed layer. The top of the upper cloud layer ascends slowly due to entrainment. Neglecting drizzle has some impact on the cloud water, but little effect on the entrainment velocity at the the top of the stratus layer. Including large-scale subsidence delays the formation of the stratus cloud