The effect of a highly conducting ocean on geomagnetic variations has been studied by means of an analog model. Analog model results for a straight coastline show good agreement with analytical results derived for the case of a concentrated current source over the edge of an infinitely conducting ocean. The analog model was extended to the case of a poorly conducting island of irregular shape in a highly conducting ocean by cutting a hole the desired shape (in this case Iceland) from a large thin sheet of lead. Although anomalous contributions in the H, D, and Z components are observed, the distortion of the horizontal field components is restricted to the seaward side of the coast. Over the interior of the island only the vertical field is affected. The model study was undertaken to provide corrections to measurements made in Iceland for deep conductivity studies. Some field observations were in fact made near the coastline, which show general agreement with the model results, but suggest that the model overemphasized the coast effect through complete neglect of the finite conductivity of the island. The field measurements indicate that at distances of 50 km or more from the coast, for periods longer than a few minutes, the coast effect can be neglected.