In the western Mediterranean Sea, sea level variations are the result of seasonal steric effect, atmospheric forcing and mesoscale circulation activity, particularly in the Alboran and Algerian basins, as well as water mass budget variations including flux variations through the Straits of Gibraltar and Sicily. However, the partition of the magnitude of the sea level variations associated with these different components remains a challenging problem. A better determination of the steric effect component will allow a better knowledge of the other annual components. The aim of this study is to improve the estimation and understanding of the annual sea level variations in the different basins of the western Mediterranean Sea, using sea level anomalies (SLA) derived from TOPEX/POSEIDON and ERS-1/2 altimeters and sea surface temperatures (SST) derived from NOAA/AVHRR infrared imagery, obtained between 1992 and 1998. The first mode of empirical orthogonal function (EOF) analysis on SLA is annual and represents 63% of the total variance. The first mode of EOF analysis on SST anomalies is also annual and represents 98% of the total variance. The lag between the annual variations of SLA and SST is about 40 days. From these EOF results and a parameterisation of the mixed layer, the seasonal dynamic height and the steric effect are estimated and removed from the SLA. The remaining signal is used to examine the annual cycles of the sea level due to water mass budget variations, mesoscale oceanic variability and atmospheric forcing.