Recent warming of Subpolar Mode Water off Greenland has been suggested to accelerate the mass loss from tidal outlet glaciers of the Greenland Ice Sheet. We present a comprehensive analysis of water masses, dynamics, and interannual hydrographic variability in Godthåbsfjord, a sill fjord in contact with tidal outlet glaciers on the west coast of Greenland. Through seasonal observations we recognize an intermediate baroclinic circulation mode driven by tidal currents and an associated important local heat source for the fjord. During summer this results in significant warming and freshening of the intermediate layer of the main fjord, and the increase in heat content is equivalent to melting of ∼2.1 km³ of glacial ice. This is comparable to ∼8 km³ glacial ice discharge estimated from the Kangiata Nunâta Sermia calving front per year. During winter the external heat source in the West Greenland Current enters the fjord as intermittent inflows of either cold (<2°C) or warm (>2°C) dense water in pulses of 1 to 3 months duration. Four distinct circulation modes are observed in the fjord, of which all can contribute to glacial ice melt. An important aspect of the ice distribution in the fjord is that only a minor fraction is exported out of the fjord.