Holocene climatic change is driven by a plethora of forcing mechanisms acting on different time scales, including: insolation, internal ocean (e.g. Atlantic Meridional Overturning Circulation; AMOC) and atmospheric (e.g. North Atlantic Oscillation; NAO) variability. However, it is unclear how these driving mechanisms interact with each other. Here we present five, biomarker based, paleoclimate records (air-, sea surface temperature and precipitation), from a fjordic sediment core, revealing North Atlantic terrestrial and marine climate in unprecedented detail. The Early Holocene (10.7–7.8 kyrs BP) is characterised by relatively high air temperatures while SSTs are dampened by melt water events, and relatively low precipitation. The Middle Holocene (7.8–3.2 kyrs BP) is characterised by peak SSTs, declining air temperatures and high precipitation. A pronounced marine thermal maximum occurs between ∼7–5.5 kyrs BP, 3000 years after the terrestrial thermal maximum, driven by melt water cessation and an accelerating AMOC. The neoglacial cooling, between 5.8 and 3.2 kyrs BP leads into the late Holocene. We demonstrate that an observed modern link between Icelandic precipitation variability during different NAO phases, may have existed from ∼7.5 kyrs BP. A simultaneous decoupling of both air, and sea surface temperature records from declining insolation at ∼3.2 kyrs BP may indicate a threshold, after which internal feedback mechanisms, namely the NAO evolved to be the primary drivers of Icelandic climate on centennial time-scales.