Contents: Nature of the Problem. Basic Equations for the Atmosphere and Oceans. Various Decompositions of the Circulation. The Data. Radiation Balance. Observed Mean State of the Atmosphere. Observed Mean State of the Oceans. Observed Mean State of the Cryosphere. Exchange Processes between the Earth's Surface and the Atmosphere. Angular Momentum Cycle. Water Cycle. Energetics. The Ocean-Atmosphere Heat Engine. Entropy in the Climate System. Interannual and Interdecadal Variability in the Climate System. Mathematical Simulation of Climate. Acknowledgments. Appendices. References.