A parameterization of subgridscale surface fluxes over the marginal seaice zone which has been used earlier in several studies is modified andapplied to a nonhydrostatic mesoscale model. The new scheme accountsfor the form drag of ice floes and is combined with a so-called fluxaveraging method for the determination of surface fluxes overinhomogenous surfaces. Individual fluxes over ice and water arecalculated as a function of the blending height. It is shown by comparisonwith observations that the drag coefficients calculated with the newparameterization agree well with data. The original scheme stronglyoverestimates the form drag effect. An improvement is mainly obtainedby an inclusion of stratification and by use of a more adequate coefficientof resistance for individual ice floes. The mesoscale model is applied tooff-ice flows over the polar marginal sea ice zone. The model results showthat under certain meteorological conditions the form drag can have a stronginfluence on the near-surface wind velocity and on the turbulent fluxes ofmomentum. Four case studies are carried out. The maximum influence of form dragoccurs in the case with strong unstable stratification and with wind obliqueto the ice edge. Under these conditions the wind stress on sea ice ismodified by at least 100% for ice concentrations less than 50% if form dragis taken into account.