We analyze two preindustrial experiments from the Community Earth System Model version 2 (CESM2) to characterize the impact of sea ice physics on regional differences in coastal sea ice production around Antarctica and the resulting impact on the ocean and atmosphere. The experiment in which sea ice is a “mushy” mixture of solid ice and brine has a substantial increase in coastal sea ice frazil and snow ice production that is accompanied by decreasing congelation growth and increasing bottom melt. With mushy ice physics, the subsurface ocean is denser and saltier, there is a statistically significant increase in Antarctic Bottom Water Formation by ~0.5 Sv, but differences in ocean biogeochemistry are minimal and only in regions where the summer ice state differs. While there are no significant changes in the atmospheric circulation, using “mushy” ice physics results in decreased turbulent heat flux, atmospheric convection, and low level cloud cover.