The physical processes that drive the circulation and the thermal regime in the bay largely control the duration and persistence of hypoxic conditions in Green Bay. A review of previous studies, existing field data, our own measurements, hydrodynamic modeling, and spectral analyses were used to investigate the effects on the circulation and the thermal regime of the bay by the momentum flux generated by wind, the heat flux across the water surface, the Earth’s rotation, thermal stratification and the topography of the basin. Stratification and circulation are intimately coupled during the summer. Field data show that continuous stratification developed at regions deeper than 15–20 m between late June and September and that surface heat flux is the main driver of stratification. Summertime conditions are initiated by a transition in the dominant wind field shifting from the NE to the SW in late June and remain in a relatively stable state until bay vertical mixing in early September. It is during this stable period that conditions conducive to hypoxia are present. Wind parallel to the axis of the bay induces greater water exchange than wind blowing across the bay. During the stratified season flows in the bottom layers bring cold water from Lake Michigan to Green Bay and surface flows carry warmer water from the bay to Lake Michigan. Knowledge of the general patterns of the circulation and the thermal structure and their variability will be essential in producing longer term projections of future water quality in response to system scale changes.