A three-dimensional barotropic and baroclinic model is developed to simulate currents and temperature changes induced by tropical cyclones traversing the continental shelf and slope region of the Australian North West Shelf. The model is based on a layered, explicit, finite difference formulation using the nonlinear primitive equations with an embedded entrainment scheme; a mixed-surface-layer interface is defined, which is allowed to shift from one interface to another, depending on the strength of a storm. The model has been tested by simulating the currents and temperature changes induced by tropical cyclones Orson and Ian. The modelled currents and temperatures agreed well with the available measured records except near the seabed. It has been found that the pre-storm currents have very little influence on the peak of the storm-induced currents and the currents in the wake of a tropical cyclone. The model contained no coefficients which must be calibrated for a particular application and clearly illustrated the importance of the baroclinic effects on the storm-induced response over the North West Shelf of Australia.