Analysis of ERS-1 synthetic aperture radar (SAR) images over the Iberian shelf shows that they contain the signatures of large-scale banded structures with characteristic wavelengths of 10--20 km, parallel to the shelf break. Their consistency with the structure of internal tides leads to the conclusion that they are the surface manifestations of internal tidal waves. The effect of imaging of such large-scale phenomena by SAR operating in L, C and X bands cannot be explained by conventional hydrodynamic modulation models based on the effect of straining of surface wind waves due to the internal tidal currents. An alternative explanation is described by an analysis of modulation of centimeter- and decimeter-scale surface waves caused by the redistribution of surface-active substances by internal tidal currents. Model calculations of variations of the wind wave spectrum across the internal tide profile are presented; an empirical film pressure-area equation and the results of thermistor chain measurements of internal tidal waves in the study area were used in the modeling. The effect of additional modulation of short surface waves due to variations of wind velocity relative to the internal tidal current is also estimated. It is demonstrated that modulation of centimeter-decimeter wind waves in the presence of surfactant films is the dominant factor and can explain the effect of internal tidal wave imaging by SAR. ¿ 1998 American Geophysical Union