The processes of cold intermediate water (CIW) formation in the Black Sea are quantified by analyzing the results of numerical simulations using the Modular Ocean Model (MOM) plus observations obtained from both hydrographic surveys and the TOPEX/POSEIDON altimeter. In the first phase of integration the model is forced with seasonally-variable atmospheric data. After reaching a quasi-periodic state, the integration is continued using forcing data for the period 1991-1994 provided by the United Kingdom Meteorological Office. The performance of the model is assessed in reproducing the dominant physical mechanisms that control the process and rate of CIW formation, viz., circulation, vertical stratification, preconditioning and convective cooling in winter. An analysis is presented of buoyancy fluxes through the sea surface, from rivers, and from the input of dense water through the Bosphorus Strait. The characteristics and rates of formation of the CIW are described, estimated from both the model and observations. The computations focus on the contribution of convective heat fluxes and the resulting re-supply of the upper pycnocline (σt = 14.5-15.5) with cold water. A critical revision of existing theories is presented for the dynamic control and relative contributions to CIW formation of different regions of the Black Sea. These regions are: (i) the continental slope in the northwestern part of the sea; (ii) the interior deep basin (dominated by the Rim Current cyclonic circulation); (iii) the NW shelf; and (iv) the eastern basin. It is shown that the cold water mass is formed over the entire Black Sea, but with pronounced regional dependency in the ratio 42%, 28%, 20% and 10%, respectively. It is estimated that the cold intermediate layer is fully replenished every ~5.5 yr.