Abstract.The The principal goal of this paper is to examine basin-scale sea surface height variability from both TOPEX/POSEIDON and Geosat altimeter data in the Labrador Sea, using a mathematical technique called complex empirical orthogonal function (CEOF) analysis. We had started this analysis with Geosat data. However, it is not realistic to derive the local sea level variability in the Labrador Sea because the long-wavelength satellite orbit error in the Geosat data is still greater than or at least comparable to the basin-scale variability of interest. Instead, the along-track orbit error is removed by an empirical fit over a much longer orbit arc than the scales of interest. Such data not only contain the local sea level variability but also are influenced by that south of the Labrador Sea (see section 3.2). Hence particular attention has to be paid to this nonlocal effect in the interpretation of the Geosat results. After analyzing the Geosat data, we examined the local sea surface height variability from the first 2 years of TOPEX/POSEIDON data, which have a high measurement precision (-2 cm) and a low orbit error (-3 cm) [Fu et al., 1994]. The steric height anomalies from the climatological monthly-mean Levitus data [Levitus, 1982], which may represent thermal expansion/contraction, 28,325