An implicit baroclinic 3-D model developed to simulate the circulation in coastal waters, is presented. The model has hydrodynamic, transport and turbulence model components. It is a composite finite difference-finite element model. In the horizontal plane, second order central finite differences on a staggered scheme and in the vertical Galerkin method with linear shape functions are used. Implicit equations are solved by Crank Nicholson method which has second order accuracy in time also. Developed model predictions are compared with the analytical solutions of steady wind-driven circulatory flow and tidal flow. Model predictions are tested with an experiment performed on the buoyant surface jet discharge. Then, the model is applied to the Goksu Lagoon system located on the Mediterranean coast of Turkey, where there exist some measurements of salinity, temperature and velocity. Model predictions are in good agreement with the field data. (C) 2002 Elsevier Science Ltd.