Ice floats because it is less dense than liquid water. When water freezes, its molecules arrange into a structure that takes up more space than the same amount of liquid water.
Density is the key idea
An object floats when it is less dense than the liquid around it. Since ice is less dense than liquid water, it stays on the surface instead of sinking.
Why this matters
Floating ice helps insulate water below it. If ice sank, lakes and ponds in cold places could freeze very differently from the way they do now.
Ice floating is a familiar example of how a material's structure can change its behavior.