Rapidly shrinking Arctic sea ice has had significant impacts on the Arctic Ocean and many outer Arctic regions. It is therefore urgently needed to reliably estimate Arctic sea-ice thickness (SIT) by combined use of available observation and numerical modeling. Here, for the first time, we assimilate the latest CryoSat-2 summer SIT data into a coupled ice-ocean model. In particular, an Incremental Analysis Update scheme is implemented to overcome the discontinuity brought by assimilating biweekly SIT and daily sea ice concentration data. Along with an improvement in sea ice volume, our SIT estimates have smaller errors than that without SIT assimilation in areas where the sea ice is roughest and experiences strong deformation, e.g., around the Fram Strait and Greenland. This study suggests that the newly-developed CryoSat-2 SIT product, when assimilated properly with our approach, has great potential for Arctic sea ice simulation and prediction.