The contrasted modes of transport and deposition of sandy and muddy contourites were examined by hydrographic, photographic, lithologic, and seismic data from Hatton and Gardar sediment drifts in the Iceland Basin, northeastern Atlantic Ocean. Gardar Drift is made of muddy contourites deposited from Iceland-Scotland Overflow Water with a thick and relatively intense nepheloid layer whose particles originate from Iceland. Hatton Drift is also mainly mud, possibly from Rockall Bank, but at its foot a strong northeast-flowing boundary current moves winnowed foraminiferal sand as ripples and low sand waves. The nepheloid layer on Hatton Drift is locally generated and is mainly in a stratum of North Atlantic Deep Water that is contaminated with Antarctic Bottom Water. This stratum, with its entrained particles, spreads across the basin as far as the crest of Gardar Drift. The bottom mixed layer over Gardar Drift is mainly thin (30-40 m) and indicative of depositional shear-stresses (u (sub *) <0.7 cm/sec. Currents are less than 12 cm/sec. Where the currents are fast (maximum 23 cm/sec) and (super *) n>0.85 cm/sec over sands at the foot of Hatton Drift, the mixed layer is 90 m thick, but this thins to less than 40 m higher up on the drift as the environment changes from winnowing towards deposition.