A model of the whole Mediterranean sea at 0.25 degrees x 0.25 degrees resolution has been run for ten years with a mean seasonal cycle of forcing using NMC winds and a relaxation to NODC surface temperature and salinity. The winter season water formation and dispersal in the model thermocline has been studied using isopycnal diagnostics and potential vorticity as a water mass tracer. In the eastern basin Levantine Intermediate Water (LIW) is formed in the cyclonic Rhodes gyre and moves west in a continuous mass, accumulating and mixing in the centre of the Northern Ionian. The LIW spreading path is identified both from the high salinity and low potential vorticity values on the 28.8 isopycnal surface. Some LIW then spreads west and south towards Sicily, and some flows NW through the Otranto straits into the Adriatic. This water is further cooled and Adriatic deep water emerges from Otranto below the LIW inflow and spreads slowly south along the Italian coast and east into the southern Ionian on the 29.0 isopycnal surface. This path is completely consistent with observed tracer data. Contrary to observations, the LIW does not reach the far eastern Levantine in this model either due to deficiencies in the forcing or the lack of mesoscale eddies which are not resolved. In the west, water is formed in the Gulf of Lions but it is fresher and lighter than observed and it becomes an intermediate water mass on the 28.8 isopycnal surface where it disperses SW towards Gibraltar. The dispersal of all the model water masses is slower than in reality because of the absence of mesoscale eddies. A 1-D vertical diffusion model is used to interpret the changes in the core LTW properties during the dispersal with some limited success.