An ocean mixed-layer model with a modified Kraus-Turner parameterization scheme is used to investigate the impacts of precipitation in the upper ocean in the western Pacific warm pool during Tropical Ocean Global Atmosphere-Coupled Ocean-Atmosphere Response Experiment (TOGA-COARE). Heat and salt budgets calculated in the upper ocean indicate local balance between surface forcing and the ocean response. Thus the mixed-layer model captures the dominant processes governing heat and salt variability. The model responses are analyzed and compared with the observed upper ocean in three distinctive layers determined by Monin-Obukhov length scales. In the top layer (the top 5 m), about 90% of the surface buoyancy flux is absorbed, and strong diurnal and intraseasonal variations are excited. The second layer, 5--20 m, contains intraseasonal variability that is characterized by nearly neutral stratification during strong westerly wind events, strong thermal stratification during clear-sky days, and strong saline stratification during heavy precipitation. The dominant effect of precipitation is to generate a stable stratification and to form a barrier layer. The third layer, 20--50 m, has intraseasonal variations due to mixing during westerly wind events. Heavy precipitation amplifies mixed-layer temperature fluctuations by a cycle of strong surface cooling and entrainment warming through the following processes. Heavy precipitation causes a shallower mixed layer and a larger cooling rate. Surface temperature drops rapidly, and the upper ocean becomes thermally unstable. The salinity maintains a weak density stability, which causes strong entrainment warming. Surface freshwater flux is the key factor controlling saline structure when advection is excluded. However, experiments without the entrainment process show a significant bias toward a lower salinity, indicating that the entrainment process must be properly treated in the model to prevent a biased trend. ¿ 1998 American Geophysical Union