Seasonal temperature variations on the Scotian Shelf penetrate to a depth of about 75 m. The net surface heat flux (Q) can explain about 85% of the annual cycle in the rate of change of mean temperature over this depth range. The long-term mean heat budget for a midshelf location shows that horizontal advection (-40 W m-2) is almost exactly balanced by the combined contributions of Q (25 W m -2), horizontal mixing (11 W m-2), and vertical diffusion (6 W m-2). The seasonal evolution of temperature structure on the mid-Scotian Shelf is modeled with a one-dimensional vertical diffusion equation, modified to include the effect of horizontal advection. The model features a vertical eddy diffusivity (Kv) that varies with the background density stratification (N) according to the parameterization Kv=K0 (1+α,Np)-1. The three free parameters (K0, α and p) are estimated by best fitting, in a least squares sense, the predicted temperatures to observations at standard depths between the surface and 100 m. Typical values of Kv lie in the range 0.2--20¿10-4 m2 s-1 with the highest values found in winter and close to the surface, as expected. The root mean square of the differences between observed and predicted monthly temperatures is small and equal to 1 0 ¿C. The root mean square of the errors increases significantly (from 1.0 ¿C to 3.1 ¿C) on fitting a constant Kv, highlighting the importance of allowing Kv to vary with depth and time. The diffusion model is finally used to examine the role of Q and horizontal advection in the seasonal evolution of the temperature profile on the Scotian Shelf and, in particular, the cold intermediate layer which is a prominent feature of the hydrography on the midshelf. ¿ American Geophysical Union 1994