The formation and dispersal of Levantine Intermediate Water (LIW) are examined using a series of tracer experiments based on an eddy-permitting general circulation model of the Mediterranean. LIW is formed in the region of the Rhodes gyre and disperses via both the time-mean and time-varying circulation. Tracer released in the Rhodes gyre is transferred westward by the time-mean circulation but also southward and eastward by the time-varying circulation. Off-line tracer experiments suggest that the time-varying circulation exhibits both advective and diffusive components, where the advective component opposes downgradient transfer in some regions. The rate of invasion of tracer into the main thermocline suggests that the renewal timescale is 10--20 years for LIW and of order 100 years for Eastern Mediterranean Deep Water. Assuming advection dominates the transfer of tracer, the implied annual subduction rate is 0.6¿0.1 Sv in the Rhodes gyre and 0.2¿0.1 Sv in the Adriatic Sea. The LIW mode is found to become cooler and fresher as a result of mixing with the Adriatic outflow, while its potential vorticity appears well conserved.¿ 1997 American Geophysical Union