The continuous measuring of the vertical profile of water vapor in the boundary layer using a commercially available differential absorption lidar (DIAL) has only recently been made possible. Since September 2018, a new pre-production version of the Vaisala DIAL system has operated at the Iqaluit supersite (63.74°N, 68.51°W), commissioned by Environment and Climate Change Canada (ECCC) as part of the Canadian Arctic Weather Science project. This study presents its evaluation during the extremely dry conditions experienced in the Arctic by comparing it with coincident radiosonde and Raman lidar observations. Comparisons over a one year period were strongly correlated (r > 0.8 at almost all heights) and exhibited an average bias of +0.13 ± 0.01 g/kg (DIAL-sonde) and +0.18 ± 0.02 g/kg (DIAL-Raman). Larger differences exhibiting distinct artifacts were found between 250 and 400 m above ground level (AGL). The DIAL’s observations were also used to conduct a verification case study of operational numerical weather prediction (NWP) models during the World Meteorological Organization’s Year of Polar Prediction. Comparisons to ECCC’s global environmental multiscale model (GEM-2.5 km and GEM-10 km) indicate good agreement with an average bias < 0.16 g/kg for the higher-resolution (GEM-2.5 km) models. All models performed significantly better during the winter than the summer, likely due to the winter’s lower water vapor concentrations and decreased variability. This study provides evidence in favor of using high temporal resolution lidar water vapor profile measurements to complement radiosonde observations and for NWP model verification and process studies.