A theoretical model for the interaction among surface gravity waves, frazil-pancake sea ice, and currents in a marginal ice zone (MIZ) is developed and is implemented into a free surface, terrain-following oceanic model (the Regional Oceanic Modeling System, ROMS). The wave model is a Wentzel-Kramers-Brillouin (WKB) model with wave refraction and dissipation. The sea ice model includes equations for sea ice mass and sea ice momentum. Wave energy is damped by sea ice, and the ice is accelerated by wave radiation stress convergence. The ocean–ice interfacial stress accelerates the currents and mixes the oceanic surface boundary layer vertically. The effects of waves on the ocean are represented by conservative wave-averaged vortex forces and material advection by Stokes drift. The model is configured to simulate obliquely incident waves impinging on a marginal ice zone over an otherwise quiescent ocean. The wave-driven ice-edge jet is unstable. Mesoscale eddies with a typical diameter of 20 km, consistent with observations, are generated. The oceanic eddy kinetic energy (EKE) can be strengthened by increasing the amount of energy transferred into the mean along-edge current by increasing either the incident wave amplitude (a physical variable) or the wave damping rate by ice (a tunable parameter). EKE also increases when the mixed layer depth decreases.