The structure and variability of the velocity and temperature fields in Yucatan Channel are analyzed using data from an eight-mooring array deployed from August 1999 to June 2000. The area-averaged kinetic energy and transport fluctuations spectra show that the extrema of these quantities do not coincide, and that flow variability is dominated by highly energetic processes with weak transport contributions. Transport fluctuations peak in the 20--40 and 5--10 day period bands, but show no clear correlation with the local wind-stress forcing. Empirical orthogonal function (EOF) analysis of the along-channel velocity component shows that approximately 55% of the total velocity variance is retained in the first two EOFs, which depict tripolar (the center of the channel is out of phase with the sides) and dipolar structures. A multivariate complex EOF analysis of low-passed temperature and velocity components suggests the tripole-dipole structures are the components of irregular oscillations of the flow, related to the northwestward propagation of anticyclones and cyclones through the channel. The weak transport signal in these modes is consistent with the eddies being advected by the mean flow. In contrast to other western boundary current regions, the passage of eddies provides the predominant explanation for the variability in the Yucatan Channel. However, the processes controlling transport variability remain unclear.