We investigate the variability of upper ocean temperature and surface salinity between Iceland and Newfoundland along World Ocean Circulation Experiment line AX2 in 1993--1998. North of 54 ¿N, as well as close to Newfoundland, deviations from the seasonal cycle indicate upper ocean warming from 1994 to 1998, with largest anomalous warming during late 1995/early 1996 and during the winter 1997/1998. North of 54 ¿N, surface salinity increases after mid-1996. The winter of 1995/1996 is the first winter of weak westerlies after more than 20 years of strong westerly conditions in the subarctic gyre, and the ocean loses less heat during that winter than during a normal year. The magnitude of upper ocean heat content change is at least twice as large as what results from the change in air-sea fluxes, which indicates a complementary contribution to heat content change by advection. Altimetric sea level data indicate also an increase of sea level of the order of 6.5 cm during that year, out of which more than 4 cm is contributed by the steric change associated with the temperature increase. A principal component analysis of the sea level data suggests that the increase sensed along line AX2 west of the Reykjanes ridge is found in most of the subpolar gyre, although to a lesser extent in most other areas. ¿ 1999 American Geophysical Union