A storm with significant wave heights exceeding 4 m occurred in the Beaufort Sea on 11 to 13 October, 2015. The waves and ice were captured on 12 October by the Synthetic Aperture Radar (SAR) on board Sentinel‐1A, with Interferometric Wide swath images covering 400 × 1100 km at 10 m resolution. This dataset allows the estimation of wave spectra across the marginal ice zone (MIZ) every 5 km, over 400 km of sea ice. Since ice attenuates waves with wavelengths shorter than 50 m in a few kilometers, the longer waves are clearly imaged by SAR in sea ice. Obtaining wave spectra from the image requires a careful estimation of the blurring effect produced by unresolved wavelengths in the azimuthal direction. Using in‐situ wave buoy measurements as reference, we establish that this azimuth cutoff can be estimated in mixed ocean‐ice conditions. Wave spectra could not be estimated where ice features such as leads contribute to a large fraction of the radar backscatter variance. The resulting wave height map exhibits a steep decay in the first 100 km of ice, with a transition into a weaker decay further away. This unique pattern has not been observed before. This transition occurs where large scale ice features such as leads become visible. As in‐situ ice information is limited, it is not known whether the decay is caused by a difference in ice properties or a wave dissipation mechanism. The implications of the observed wave patterns are discussed in the context of other observations.