Three cruises were conducted during fall and spring in the Labrador Sea to investigate the effects of bio-optical properties on satellite retrievals of phytoplankton chlorophyll in this important high-latitude ecosystem. Taxon-specific and regional differences were found. Diatoms had ~1.5 lower chlorophyll-specific absorption but significantly higher reflectance ratios than prymnesiophytes. Particulate absorption at 443 nm for total, phytoplankton, and detrital fractions was related to chlorophyll, but values were lower than reported for lower latitudes. Decreased particulate absorption is attributed primarily to pigment packaging, while low backscattering to scattering ratios result from a lower relative abundance of bacteria and picophytoplankton with more large phytoplankton. Soluble absorption was not related to chlorophyll. A four-component model with low, variable backscatter fractions and the observed absorption coefficients for phytoplankton, detritus, and soluble materials reproduces the measured reflectance spectra. Global chlorophyll algorithms tend to underestimate biomass at high latitudes, whereas regionally tuned algorithms provide more reliable retrievals. Taxon-specific algorithms show promise, but given limited ranges, small sample sizes, and overlapping reflectance ratios they remain premature.