The Arctic Council plays a vital role in the regional international relations system. It acts as a core cooperation mechanism for the Arctic states, which allows them to coordinate their efforts across a number of issue areas. Such cooperation between state and non-state actors is needed because of harsh climate conditions, a high degree of inaccessibility, underdeveloped infrastructure and difficult overall economic situation, aggravated by problems specific to indigenous communities. The article analyzes the history, evolution and transformation of the Arctic Council, tracing the progress of its institutionalization to determine its effectiveness in addressing the most pressing regional issues, such as climate change, economic development, waterways security and safety, as well as the delimitation of the Arctic Ocean. Drawing on national documents and official statements, the article also provides information on the official positions of the “Arctic Five” countries (Canada, Denmark, Norway, Russia and the United States) on their involvement in the Arctic Council as well as their views on the future of such collaboration and the forum’s potential institutionalization. The institutionalization trend has pervaded the Arctic Council’s agenda since the first ministers’ meeting in 1996. Despite several members’ reluctance to see the council as a new universal international organization responsible for dealing with the full spectrum of Arctic issues, this goal was a principle motivation behind the transformation of the 1991 Arctic Environmental Protection Strategy into the full-fledged international forum. The principal limitations of the Arctic Council lie outside of the institution’s agenda and scope. Geopolitical differences and conflicts that do not directly relate to the Arctic region, such as the conflict in Ukraine, can potentially disrupt the council’s activities. However, despite these difficulties, the forum’s concrete and depoliticized agenda facilitates cooperation among the states, which continue to engage on non-political, yet nonetheless prominent, Arctic issues.