Expendable Bathythermograph (XBT) observations collected along a transect across the Eastern Mediterranean are compared with the respective predictions of thermocline structure and variability produced by the POSEIDON system's ocean circulation model. The observations, obtained in the framework of the Mediterranean Forecasting System project, cover a complete annual cycle, at a repetition rate of 1-2 transects per month, thus providing an excellent data set for estimating the model's skill to forecast seasonal variability and mesoscale circulation in the upper 450 m of the ocean. The comparison has revealed that the model adequately predicts the seasonal cycle of the evolution of the thermocline but tends to generate less steep thermoclines than observed. Furthermore, the mesoscale circulation is not accurately predicted. For the latter, data assimilation is considered a necessary step towards the improvement of the system.