Observations are presented of deep‐water exchange in a large coastal embayment on the south coast of Newfoundland. The bay has several outer sills not unlike those found in fjords. Outside the bay, two submerged channels on the continental shelf are reservoirs for two different deep‐water masses which may flow over separate sills to replace deep water within the bay. The deep water is renewed approximately twice a year. On average, exchange occurs both during the half‐year period centered on midwinter and during the half‐year period centered on late summer, with the water properties of the inflow in each period being dominated by one of the two source water masses in the shelf channels. The system therefore occupies one of two renewal states for much of the year. The transition between states appears to be induced largely by seasonal variations in the wind forcing over th