The physical and hydrodynamic conditions in the Banda and Northern Arafura Seas (BAS) during northwest monsoon (February 2014) were investigated using a three-dimensional baroclinic nonlinear numerical model—the Hamburg Shelf Ocean Model (HAMSOM). This study found that northwesterly winds induced eastward surface currents that transported relatively fresh water from the Flores Sea to the Arafura Sea via the Banda Sea. It was also found that the westerly surface currents carried relatively cold water induced by upwelling along the northern coast of the Lesser Sunda Islands. Furthermore, the simulation results revealed that relatively saline surface water from the Indian Ocean intruding through the Ombai Strait and Timor Passage contributed to the surface water of the Eastern Banda Sea and Aru Basin being more saline than the surrounding water. Part of the surface water sank as a result of downwelling in the Arafura Sea. The BAS had higher salinity than the Makassar Strait at a depth of 75 –300m. The simulation results suggested that the higher salinity was due to the influence of the South Pacific Subtropical Water (SPSW) that entered the Indonesian Seas primarily through the Halmahera Sea.