Abstract The effect of the North Atlantic Oscillation (NAO) indices on climatic conditions and their subsequent influence on water temperature of two Basque estuaries (estuary of Bilbao and estuary of Urdaibai) were assessed by transfer function (TF) models for the period 1997–2006. Results showed that air temperature had an immediate (lag=0) and significant negative response to the NAO, whereas rainfall was not correlated with this climate index. The negative correlation between NAO and air temperature was found to be stronger with the seasonal indices derived from the differences in surface pressure between Iceland and Azores than with that derived from the principal component time-series of the leading eigenvector of the sea-level pressure in an Atlantic sector. The correlations between rainfall and river discharge, and between air temperature and water temperature were positive and highly significant in both estuaries. The response of water temperature to air temperature was immediate in both estuaries, whereas one-quarter lagged responses were also observed in the estuary of Bilbao, which is deeper and more stratified than the estuary of Urdaibai. Our study provides evidence that on the Basque coast the NAO plays an important role in climate variations, which in turn affect estuarine water temperature.