The transformation of ocean water masses at high latitudes is closely related to the freezing and melting processes during the year. Downward salt fluxes from brine rejection during freezing increase the salinity and density of the water column underneath. Fresh-water input from river run-off and melting of sea ice reduces the density, mainly of the surface layer. Hydrographic profiles collected in Storfjorden, Svalbard, in spring and summer, show the strong seasonal and interannual variability of the water masses. Using, in addition, data from moorings, a ship-borne acoustic Doppler current profiler and drifting buoys, and results from models of ice drift, polynya evolution, ice formation and convection processes during freezing, we document the seasonal water-mass transformation and try to explain its interannual variability. The advection of ice and water through the two northern sounds and over the sill in the south of the fjord is examined. The release of brine-enriched bottom water over the sill must be balanced by advection from the Barents Sea in the upper layers. The interannual variability of the brine-enriched bottom layer is very high, and higher salinities are observed in a milder winter. The density anomaly resulting from freezing might depend more on the ice cover and geographical position of the polynya than on the total atmospheric forcing during winter.