Two years of Geosat data (November 1986 to December 1988) for the Azores-Madeira region of the North Atlantic are analyzed. The objective is to study the eddy field associated with the terminal retroflection of the Azores current. The rms variability of sea level anomaly is 4 to 8 cm, with maximum values between 33¿ and 35¿N being associated with the Azores current and located on its northern flank. Higher energy is observed during winter and during the year November 1987 to November 1988. Analysis of velocities at crossovers reveals anisotropy with larger meridional velocity variances. This is the signature of meanders and/or eddies elongated in the north-south direction. The eddy-mean flow interaction is studied through the analysis of the Reynolds tensor. Meridional and zonal accelerations of the mean by the eddy field are consistent with retroflection of the Azores Current to the south and to the west. Spectral analyses show that the dominant signals have periods and wavelengths larger than 100 days and 300 km, respectively. Propagation velocities are westward but slow (1.5 km/d). Synoptic mapping of the eddy field shows the wavelike structure of the variability on the northern flank of the current. It is likely that the wave generation is not directly due to an instability of the Azores current but is attributable to a cause more to the east. Once formed, the wave interacts with the current in winter and forms meanders. Seasonal variations of the surface circulation are finally analyzed from the 2-year-long time series of synoptic maps. There is a clear seasonality in the surface circulation which generally appears to be consistent with historical in situ measurements. In winter there is a strong meandering and a southward branching, while in summer the mean front is narrower and penetrates further to the east. ¿ American Geophysical Union 1994