Arnason won the inaugural James Tiptree Jr. Award in 1991 and the 1992 Mythopoeic Award for "A Woman of the Iron People" and in 2000 won the Gaylactic Spectrum Award for Best Short Fiction for "Dapple" and the HOMer Award for her novelette "Stellar Harvest". "Stellar Harvest" was also nominated for a Hugo Award in 2000. In 2003, she was nominated for two Nebula Awards for her novella "Potter of Bones" and her short story "Knapsack Poems". In 2004, she was guest of honor at Wiscon. She lives in Minnesota.