Embayments on large lakes may be affected by water exchange with the lake that, in turn, impact water quality in the embayment. In this study we examine the influence of hydrodynamic factors that may play a role in controlling water quality in Sodus Bay, the largest enclosed embayment on the U.S. shoreline of Lake Ontario. The motivation for this study was the occurrence of a blue-green algal (cyanobacterial) bloom in 2010, and the need to understand the factors that influence this and other water quality issues. A hydrodynamic model with high spatial and temporal resolution was applied and calibrated to field data collected in a detailed sampling program in 2013. The model, along with field data collected over several additional years, was then used to develop a comprehensive understanding of the hydrodynamic impacts on physical conditions in the bay. A primary result of this process is a determination of the importance of flow exchange between Lake Ontario and Sodus Bay, particularly during lake upwelling periods that cause colder water to enter the bay as an underflow. Hydrodynamic features identified to have played a potential role in the bloom formation of 2010 include a lake upwelling event, strong stratification, and relatively warm conditions throughout much of the summer. Lack of continuous monitoring in 2010 precludes a specific comparison of the model and data when the bloom formed, but the model clearly shows conditions that would have led to a bloom, assuming other preconditions were in place. The customized hydrodynamic model provides opportunities for future ecological modeling, hypothesis development, and what-if scenario testing. This study reinforces the importance of hydrodynamic interactions between lakes and embayments, and their impacts on water quality.