Most classification schemes and analyses of estuarine and exchange flows use only salinity as a tracer. Temperatures are generally ignored. However, a proper understanding of the effects of surface heating can explain observed seaward changes in the slope of temperature-salinity correlations. A theory is proposed relating changes in temperature and salinity with transport and mixing parameters in a two-layer exchange flow. Results show that along-channel changes in the slope of T-S correlations are virtually independent of vertical mixing but are directly related to horizontal layer transport. Changes in the layer salinities can be related to various ratios of horizontal and vertical transports. Combining these two features of the theory permits a diagnostic determination of Lagrangian transport and mixing from standard hydrographic observations of layer temperature and salinity and an estimate of the surface heat input. The theory is applied to observations made through the spring/neap tidal cycle of mixing in Haro Strait, British Columbia. ¿ 1998 American Geophysical Union