Sea level observations and a dynamical model are used to investigate tide-surge interaction in the coastal waters off the east coast of Canada and northern USA. The study is motivated in part by the need to improve operational forecasts of total water level and coastal flooding. Two statistical methods are used to search for evidence of tide-surge interaction in hourly sea level records from 23 coastal locations. The methods are based on comparison of the statistical properties of the sea level residuals (observed sea level minus tide) occurring at different stages of the tidal cycle. While recognizing the limitations of such an approach, it is concluded that tide-surge interaction does occur in the Northumberland Strait which is located in the southern Gulf of St. Lawrence. Results for the Gulf of Maine and Bay of Fundy are less conclusive. A dynamical model is also used to quantify tide-surge interaction in the study region and to identify its physical causes. Tide-surge interaction in the model is strongest in the Northumberland Strait where the amplitude of the effect can reach 20 cm during and following strong storm surge events. This is large enough to be of practical significance in terms of flood forecasting. A series of sensitivity experiments with the model shows that the nonlinear parameterization of bottom stress is the principal contributor to tide-surge interaction.