The seasonal sequence of processes affecting the upper ocean heat budget in the California Current region is presented, based on satellite data and long-term observations. In spring, an abrupt onset of upwelling-favorable winds occurs over large cross-shore and alongshore spatial scales. A zone of equatorwards coastal flow (the California Current) begins widening across-shore, within which the ocean gains heat from the atmosphere. Thinning of clouds in the coastal region increases in summer, in turn increasing the largest component of the net heat flux, solar radiation. Oceanic heat advection is dominated year-round by losses due to equatorwards flow of relatively cold water, both in terms of frequency and magnitude of events. A strong SST front defines the outer edge of the current as it widens through the summer and fall, followed by its collapse. Within the water column, heat is mixed downwards as the mixed layer deepens through the fall and winter. Differences in this seasonal sequence characterize the three subregions identified by Lynn and Simpson (1987), namely the California Current, a transitional zone, and the open ocean.