Abstract Current and hydrographic data were collected during April 1981 at the northern entrance to Peel Sound to determine the vertical nature of currents and transport in Peel Sound and its contribution to the transport in the Northwest Passage (Barrow Strait). The data indicates that during the winter of 1981 part of the eastward transport in Barrow Strait loops southwards into northern Peel Sound, before continuing eastwards through Barrow Strait. The northward transport in Peel Sound occurred at a rate of 17 × 10 4 m 3 s −1 (0.17 Sv), which equals one-third of the eastward transport in Barrow Strait. Long-term variations in currents and transport rates vary 25% about their mean and are possibly caused by atmospheric pressure gradient variations along the Northwest Passage. The semidiurnal tidal currents dominated the shorter period current signal and ranged in magnitude from 10 to 35 cm s −1. Friction in the boundary layer under the ice-cover affects the tidal currents in the same way as in the bottom boundary layer. The currents are reduced and the direction of rotation of the current vector changes from a clockwise direction at mid-depth to a counterclockwise direction in the surface and bottom boundary layers.