Analysis of vertical thermohaline structure along the western boundary of the Bay of Bengal revealed many undulations during April–May 2003. A prominent feature noticed was a dome in the northwestern boundary of the Bay of Bengal, which was found to be a cyclonic eddy (NCE). This eddy altered the ambient temperature by 6 degrees C and salinity by 0.8 psu. NCE was formed from a meander generated out of an instability due to cross-shore density gradient in the northeastward flowing western boundary current during early February. The cross-shore density gradient was developed under the influence of cyclonic (upwelling)/anticyclonic (downwelling) wind stress curl along the western boundary/open ocean region and the westward propagating Rossby wave. EOFs of SLA showed that annual cycle (EOFs 1 and 2) accounts for 39% of the total variance, while meso-scale eddies contributed up to 25% of the variance. Meso-scale eddies dominate the BOB circulation and are able to enhance the surface chlorophyll whenever the stratification is weak as in the case of intermonsoon 2003.