Continuous time-series measurements of near surface meteorological and ocean variables obtained from Research Moored Array for African-Asian-Australian Monsoon Analysis and Prediction (RAMA) moorings at 15°N, 90°E; 12°N, 90°E; and 8°N, 90°E and an Ocean Moored buoy Network for Northern Indian Ocean (OMNI) mooring at 18°N, 90°E are used to improve understanding of air-sea interaction processes and mixed layer (ML) temperature variability in the Bay of Bengal (BoB) at seasonal time scales. Consistent with earlier studies, this analysis reveals that net surface heat flux primarily controls the ML heat balance. The penetrative component of shortwave radiation plays a crucial role in the ML heat budget in the BoB, especially during the spring warming phase when the ML is thin. During winter and summer, vertical processes contribute significantly to the ML heat budget. During winter, the presence of a strong barrier layer and a temperature inversion (warmer water below the ML) leads to warming of the ML by entrainment of warm subsurface water into the ML. During summer, the barrier layer is relatively weak, and the ML is warmer than the underlying water (i.e., no temperature inversion); hence, the entrainment cools the mixed layer. The contribution of horizontal advection to the ML heat budget is greatest during winter when it serves to warm the upper ocean. In general, the residual term in the ML heat budget equation is quite large during the ML cooling phase compared to the warming phase when the contribution from vertical heat flux is small.