In situ observations and a coupled bio-physical model were used to study the germination, initiation, and development of the Gulf of Maine (GOM) Alexandrium fundyense bloom in 2006. Hydrographic measurements and comparisons with GOM climatology indicate that 2006 was a year with normal coastal water temperature, salinity, current and river runoff conditions. A. fundyense cyst abundance in bottom sediments preceding the 2006 bloom was at a moderate level compared to other recent annual cyst survey data. We used the coupled bio-physical model to hindcast coastal circulation and A. fundyense cell concentrations. Field data including water temperature, salinity, velocity time series and surface A. fundyense cell concentration maps were applied to gauge the model's fidelity. The coupled model is capable of reproducing the hydrodynamics and the temporal and spatial distributions of A. fundyense cell concentration reasonably well. Model hindcast solutions were further used to diagnose physical and biological factors controlling the bloom dynamics. Surface wind fields modulated the bloom's horizontal and vertical distribution. The initial cyst distribution was found to be the dominant factor affecting the severity and the interannual variability of the A. fundyense bloom. Initial cyst abundance for the 2006 bloom was about 50% of that prior to the 2005 bloom. As the result, the time-averaged gulf-wide cell concentration in 2006 was also only about 60% of that in 2005. In addition, weaker alongshore currents and episodic upwelling-favorable winds in 2006 reduced the spatial extent of the bloom as compared with 2005.