The Gulf Stream between Cape Hatteras and the New England Seamounts varies in position over a wide range of time scales. We present evidence that interannual path changes may be governed by a time-varying outflow of waters from the Labrador Shelf region. When the shelf and Slope Waters south of New England turn cold and fresh, the stream frequently assumes a more southerly track and conversely when the waters are warm and saline. These changes in path and surface water properties most likely result from large variations in shelf transport and thus greater or less dilution of the warm saline Gulf Stream waters that continually leak from the current into the Slope Sea. These observations point to a thermohaline rather than winddriven mechanism for governing the path of the Gulf Stream after it leaves the coast. ¿ 2000 American Geophysical Union