The seasonal circulation of the upper 1000 m of the North Atlantic between 40¿--55 ¿N and 20¿--40 ¿W is calculated using the traditional dynamic method and a circulation model with a density field that evolves with the flow. The model is of finite difference form and is based on dynamics that describe the nonlinear evolution of the ocean at low Rossby number. The model is controlled by initial and boundary conditions that include air-sea buoyancy and momentum fluxes. The model is run in two ways: with controls specified directly from observations and with controls inferred by the assimilation of all available data. These data include surface drifter trajectories, sea levels from the TOPEX/Poseidon altimeter, Bunker air-sea fluxes, and the Levitus climatological monthly means of temperature and salinity. We conclude that the North Atlantic Current transport is 40¿18 Sv with seasonal variations of the order of 2 Sv. The mean vertical transport out of the region is 2¿9 Sv and is subject to seasonal variations of 2 Sv. Overall, these estimates are in good agreement with integral North Atlantic Current features derived from independent long-term measurements made in the region over the past decade. The optimal ocean state has a volume transport across the western boundary of 51¿3 Sv with a maximum transport of 61¿5 Sv in April-May and a minimum of 42¿3 Sv in October--November. This western inflow is compensated by mean outflows of 28¿2 (east), 16¿2 (north), 5¿2 (south), and 1.8¿0.4 Sv out of the domain at 1000 m. Sensitivity studies show that nonlinear mixing and seasonality are important in determining the overall circulation. Specifically, steady boundary forcing leads to annual mean transports that are 15--25% smaller than transports obtained with seasonal forcing. Winter convection is also shown to play a significant role in determining the overall circulation pattern. ¿ 2001 American Geophysical Union