Abstract The water mass produced during wintertime convection in the Labrador Sea [i.e., the Labrador Sea Water (LSW)] is characterized by distinct thermohaline properties. It has been shown to exert a critical impact on the property and circulation fields of the North Atlantic. However, a quantitative understanding of the transformation and formation processes that produce LSW is still incomplete. Here, we evaluate the mean water mass transformation (WMT) and formation rates in the Labrador Sea, along with their forcing attributions, in both density and thermohaline coordinates using observation-based datasets during 2014–19. We find that while surface buoyancy loss results in an expected densification of the basin and thus LSW formation, interior mixing has an indispensable and more complex impact. In particular, mixing across density surfaces is estimated to account for 63% of the mean formation rate in the LSW layer [4.9 Sv (1 Sv ≡ 106 m3 s−1)] and does so by converting both upper-layer and overflow layer waters into the LSW layer. In addition, mixing along density surfaces is shown to be responsible for the pronounced diathermohaline transformation (∼10 Sv) west of Greenland. This is the primary process through which the cold and fresh LSW in the basin interior is exchanged with the warm and salty Irminger Water in the boundary current. Results from this study underline the critical role of mixing (both across and along density surfaces) in determining the volume and properties of the LSW, with implications for better understanding and simulating deep-water evolution under climate change.