In the Bay of Bengal, the water transport and potential vorticity (PV) during the southwest monsoon are examined through the prevailing thermohaline and wind-driven circulation. The Indian Monsoon Current (IMC) and the north flowing Eastern Boundary Current (EBC) contributed to an influx of 3.5 x 10 sup(6 m sup(3/s water respectively. The influence of overlying less saline, fresher water at the northern Bay: Ekman suction due to the wind stress curl in the central Bay; and the east-flowing IMC in the southern Bay have been explained in relation to distribution of PV as shallow (24.0 s sub(Q)) isopycnal. The EBC is characterized by uniform, higher PV (100 x 10 sup(-11) m sup(-1) S sup(-1)) while the IMC by a lower value (75 x 10 sup(-11) m sup(-1) S sup(-1)). Following the depth of varying influence of wind from north (500 m) to the south (250 m), the waters of the Bay have been divided into upper and lower layers where horizontal advection and diffusion indicated dominance in the upper and lower layers up to 1200 m with predominant lateral (isopycnal) mixing over the vertical (cross-isopycnal) mixing.