Halifax Harbour is one of the world's largest natural harbours and has significant environmental and economic value. A good understanding of oceanographic processes is required for pollution control and sustainable development of the Harbour. A five-level nested-grid coastal ocean circulation model known as the Nested-grid Coastal Ocean Prediction System for Halifax Harbour (NCOPS-HFX) is used to reconstruct the three-dimensional circulation and hydrography and associated temporal and spatial variability of the Harbour. The NCOPS-HFX is driven by tides, meteorological forcing, and buoyancy forcing associated with river and sewage discharges. Model performances are assessed by comparing model results with available observations including sea level from tide gauges, CTD observations, current meter records and monthly mean climatology of temperature and salinity. Model results are also used to examine the main physical processes affecting circulation and hydrography in the Harbour. It is found that the near-surface currents in the Harbour are significantly affected by tides and wind forcing with an intense tidal jet in the Narrows and a salinity front in the upper layer of Bedford Basin. The time-mean circulation produced by the model is characterized by a typical two-layer estuarine circulation with seaward flow in the upper layer and landward flow in the lower layer. The model also reproduces reasonably well the seasonal changes of temperature and salinity in the Harbour. Dispersion and retention in the Harbour are studied based on numerical passive tracer and particle tracking experiments. The e-folding flushing time is about 40 and 90 days in the upper and entire Bedford Basin respectively, 2-5 days over the Inner and Outer Harbour, and about 1 day in the Narrows.