Analyses of CTD and current meter data obtained between 1978 and 1988 off southern Labrador reveal two distinct regimes in the Labrador Current. The first lies over the shelf and upper slope and is the traditional Labrador Current transporting cold low-salinity water south from Baffin Bay and Hudson Strait. The main branch of this flow, located over the shelf break, exhibits an annual variation in speed with a minimum in March–April and a maximum in October. Historical temperature and salinity data suggest this variation is related to the fact that the annual variation in steric height is 0.1 m greater over the continental shelf than over the deep ocean. The greater amplitude over the shelf is due to the large salinity variations induced by the additional freshwater in spring and summer, which is largely confined to the waters over the shelf. The effect of the annual variation in salinity is also examined through diagnostic estimates of the Joint Effect of Baroclinicity and Relief (JEBAR). These reinforce the contention that there is an annual variation in both speed and transport of the flow over the shelf break in response to the variation in the freshwater transport from the north. The second current regime, referred to in this analysis as the deep Labrador Current, lies over the lower continental slope, seaward of the flow over the shelf break. It is a more barotropic flow than the shelf break current and exhibits a different annual cycle. The flow minimum appears in summer rather than spring, and the maximum is in winter rather than fall. This observation is consistent with earlier estimates of the Sverdrup transport in the subpolar gyre.