Abstract The properties and heat budget of marine heat waves (MHWs) on the northern South China Sea (SCS) continental shelf are investigated. MHWs with warming amplitudes above 1.5°C occur mainly along the coast, and their temperature anomaly decreases toward the open sea. MHWs with 1°–1.5°C warming and duration < 20 days dominate the northern SCS continental shelf. A heat budget analysis indicates that the main heat source is the sea surface net heat flux. Oceanic processes are dominated by the advection of mean temperature by the anomalous horizontal velocity (advha). The net contribution of advha always cools the upper layer of the ocean, resulting in the decay of MHWs. Active cross-slope water exchanges exist at the east and west sides of the northern SCS continental shelf edge, which makes the dominant contributions to the advha. In the MHW developing phase, the west (east) side makes a positive (negative) contribution to the advha. In the decay phase, both sides make a negative contribution to the advha, resulting in the rapid decay of MHWs. Although the contribution of advha to the heat budget varies along the northern SCS continental shelf edge, its net effect always cools the MHWs over the shelf. These results provide new insight into the characteristics and formation mechanism of MHWs on the northern SCS continental shelf; in particular, they clarify the respective contributions of air–sea flux and oceanic processes to MHWs. Significance Statement Marine heat waves (MHWs) are unusual warming events in oceans that heavily affect marine ecosystems and arouse great concern from citizens. MHWs are active in the northern South China Sea (SCS) continental shelf. On the northern SCS continental shelf, the sea surface net heat flux is the main heat source of MHWs, and ocean current anomalies always cool the upper layer of the ocean. Active cross-slope water exchange at the east and west sides of the northern SCS continental shelf edge is the main oceanic way that cools the water on the shelf, eventually resulting in the decay of MHWs.