The first ERS-1 C-band SAR image of the western coast of Norway was received at Troms∅ Satellite Station, Norway, on 21 August 1991. It depicts clearly an eddy-like structure located in the coastal water. The eddy has a cyclonic spiral structure with a diameter of about 5 km. The expressions of the dark lines outlining the spiral are probably caused by the presence of natural surface slicks resulting in a damping of the Bragg scattering waves. Eddies at this particular location with the same spatial characteristics are also detected in simulations with a nonlinear, one-layer active reduced gravity model. From the model results we conclude that the eddy is formed by horizontal current shear instability associated with variations in the larger scale coastal current. A second case of an observed and simulated eddy occurred later in the Outer Oslofjord. The simultaneous observations and simulations of these eddies clearly demonstrate the potential advantage in integrated use of weather independent SA R data and model results for the monitoring and modelling of mesoscale circulation processes.