The characteristics of a persistent gyre in the mouth of the Bay of Fundy are studied using model simulations. A set of climatological runs are conducted to evaluate the relative importance of the different forcing mechanisms affecting the gyre. The main mechanisms are tidal rectification, and density-driven circulation. Stronger circulation of the gyre occurs during the later part of the stratified season (July-August and September-October). The density-driven flow around the gyre is set-up by weak tidal mixing in the deep basin in the central Bay of Fundy and strong tidal mixing on the shallow flanks around Grand Manan Island and western Nova Scotia. Retention of particles in the Gyre is controlled by the residual tidal circulation, increased frontal retention during stratified periods, wind stress, and interactions with the adjacent circulation of the Gulf of Maine. Residence times longer than 30 days are predicted for particles released in the proximity of the gyre.