Water mass characteristics and circulation patterns in the Gulf of Aqaba and northern Red Sea were studied for the first time during the r/v "Meteor" cruise leg 44/2 from February 21st to March 7th 1999 using temperature-salinity profiles and current observations. The deep water in the northern Red Sea had similar characteristics to the well-mixed upper 450 m of water in the Gulf of Aqaba. This indicates that the winter mixed waters of the Gulf of Aqaba contribute significantly to deep-water in the northern Red Sea. Mixing in the Gulf of Aqaba is an annually repeated event that starts with the cooling of the surface water during November-December and reaches a maximum, which in most years extends down the entire water column in March-April. Waters deeper than the mixed layer in the Gulf seems to be rather passive and play no specific role in water mass formation in the northern Red Sea. In contrast to the Gulf of Aqaba, the upper 200 m of the northern Red Sea were stratified (21.5-23.5^oC, and 40.0-40.3 PSU). Stratification at the Strait of Tiran was weak (21.6-22.0^oC, and 40.3-40.5 PSU) and disappeared abruptly in the Gulf of Aqaba (21.4-21.6^oC, and 40.6-40.7 PSU). A well-developed cyclonic gyre with a diameter of about 50-60 km and maximum velocity of about 0.4 m s^-1 was observed in the stratified upper 200 m of the northern Red Sea waters. The gyre may contribute to the preconditioning for intermediate water formation in the northern Red Sea.