The locations, times, and mechanisms by which heat and salt are transported through and within the Nordic Seas are discussed. The analysis is based on a regional, high resolution coupled sea ice-ocean numerical model, a climatological hydrographic data set, and atmospheric reanalysis. The model and climatology are broadly consistent in terms of heat loss, water masses, and mean geostrophic currents. The model fields are used to demonstrate that the dominant exchange between basins is an export of warm, salty water from the Norwegian Sea into the Greenland and Iceland Seas, with both the mean cyclonic boundary current system and eddy fluxes playing important roles. In both the model and the climatology, approximately 2/3 of the heat loss to the atmosphere over the Nordic Seas is found over the mean cyclonic flow and 1/3 takes place within the closed recirculations in the interior of each of the basin gyres, with the Norwegian Sea having the largest heat loss. The seasonal cycle is dominated by local air-sea heat flux within the gyres while it is dominated by lateral advection in the cyclonic boundary current, particularly in the northern Norwegian and Greenland Seas. The freshwater flux off the east Greenland shelf is correlated with the local winds such that in winter, when winds are generally towards the southwest, freshwater is advected onto the shelf and in summer, when winds are weak or towards the northeast, freshwater is advected into the Greenland Sea, which leads to salinification in winter and freshening in summer.