Long‐wave theory and simple turbulence closures have been used to show that three distinct types of circulation (highly stratified, weakly stratified, and partially mixed) arise in narrow, shallow estuaries from the finite amplitude of the tide and the interaction of stratification with vertical mixing. Each type has a different dominant process causing the vertical exchange of salt and fresh water on the flood, and each gives rise to a characteristic residual circulation. The tidal circulation in highly stratified shallow estuaries, described herein, is the result of a finite amplitude internal motion driven by the barotropic tide; shear instabilities at the interface are the major vertical exchange mechanism. The residual circulation is caused primarily by ebb‐flood asymmetry in interface position and thickness. A model based on our theoretical analysis shows that the interface thickness on flood is much less than the depth of flow up to a critical tidal amplitude at which the two‐layer flow is destroyed, and correctly predicts the tidal amplitude of the neap‐spring transition in the Columbia River Estuary. Tidal frequency internal wave motion is not found in weakly stratified and partially mixed estuaries. Because of the reduced tidal shear, shear instabilities are weak or absent, and the residual circulation assumes a very different character, as described in