In this paper, we evaluate the temporal and horizontal resolution of geostrophic surface velocities calculated from TOPEX satellite altimeter heights. Moored velocities (from vector-averaging current meters and an acoustic Doppler current profiler) at depths below the Ekman layer are used to estimate the temporal evolution and accuracy of altimeter geostrophic surface velocities at a point. Surface temperature gradients from satellite fields are used to determine the altimeter's horizontal resolution of features in the velocity field. The results indicate that the altimeter resolves horizontal scales of 50--80 km in the along-track direction. The rms differences between the altimeter and current meters are 7--8 cm s-1, much of which comes from small-scale variability in the oceanic currents. We estimate the error in the altimeter velocities to have an rms magnitude of 3--5 cm s-1 or less. Uncertainties in the eddy momentum fluxes at crossovers are more difficult to evaluate and may be affected by aliasing of fluctuations with frequencies higher than the altimeter's Nyquist frequency of 0.05 cycles d-1, as indicated by spectra from subsampled current meter data. The eddy statistics that are in best agreement are the velocity variances, eddy kinetic energy and the major axis of the variance ellipses. Spatial averaging of the current meter velocities produces greater agreement with all altimeter statistics and increases our confidence that the altimeter's momentum fluxes and the orientation of its variance ellipses (the statistics differing the most with single moorings) represent well the statistics of spatially averaged currents (scales of 50--100 km) in the ocean. Besides evaluating altimeter performance, the study reveals several properties of the circulation in the California Current System: (1) velocity components are not isotropic but are polarized, strongly so at some locations, (2) there are instances of strong and persistent small-scale variability in the velocity, and (3) the energetic region of the California Current is isolated and surrounded by a region of lower energy starting 500--700 km offshore. This suggests that the source of the high eddy energy within 500 km of the coast is the seasonal jet that develops each spring and moves offshore to the central region of the California Current, rather than a deep-ocean eddy field approaching the coast from farther offshore.¿ 1997 American Geophysical Union