To elucidate the importance of lateral circulation in estuaries, a tidal circulation model was applied to Broken Bay and the lower Hawkesbury River estuarine system in New South Wales, Australia. The numerical simulation model solves the vertically averaged governing equations explicitly on a 61 × 51 finite difference grid, utilizing a 6.5-s computational step. The model is forced with an M2 tidal wave with a 1.1-m range, steady homogeneous wind stress, and river discharge. The time-averaged circulation is computed as residual transport velocities and consists of a series of residual circulation gyres. These gyres are due to tidal ebb-flood flow asymmetries and suggest the importance of lateral estuarine circulation. Very limited field data are consistent with this interpretation. Gyres in open areas change their sense of rotation in response to changing wind stress, whereas the gyres in the main channel appear to be independent of wind stress. With river discharge increased from 38 to 1250 m3 s-1, the gyres are replaced by strong ocean-directed residual velocities. The residual Stokes' drift is everywhere landward-directed and is weak except in shallow, constricted areas.