We investigated circulation and water mass modification processes in the Chukchi Sea using (1) temperature, salinity, and velocity data collected between September 1991 and September 1992 from moorings in Bering Strait and the northeast shelf, and (2) meteorological data and ice concentrations derived from special sensor microwave imager (SSM/I) imagery. In October 1991 and from February to August 1992 the mean monthly circulation was steady and northward. From November to January, strong northeast winds diverted the low-salinity Bering Inflow onto the western shelf, and weakened and reversed flow over the northeast shelf. The winds also opened extensive polynyas, wherein cold hypersaline (salinity >~34) waters formed. The fall/winter circulation enhanced dense water formation by diverting low-salinity waters away from, and prolonging the residence time of water within, the polynyas. Alongshore convergence of the coastal flow swept some of the cold hypersaline water offshore (across isobaths), but the coastal current carried most of it into the Arctic Ocean through Barrow Canyon. The dense outflow mixed little during its descent through the upper canyon, where bottom friction and rotation, but not entrainment, were important in the plume momentum balance. If the outflow is not diluted by mixing in the lower canyon (where theory suggests this will occur), then the densest shelf waters can ventilate layers deeper than the halocline. Salt rejection estimates using SSM/I data and surface heat budget calculations agree, within a factor of 2, with independent estimates from the mooring. Hence remote sensing techniques can monitor winter salt rejection rates in the Chukchi Sea. ¿ 1998 American Geophysical Union