A three dimensional baroclinic numerical model which consists of hydrodynamic, transport and turbulence model components, has been applied to two test cases, including: the wind induced flow in a laboratory basin and tidal flow in a model rectangular harbor. The agreement between the physical and numerical model results is highly encouraging. Model has been implemented to Oludeniz Lagoon located at the Mediterranean coast of Turkey to simulate tidal and wind driven currents. M2 tide is the dominant tidal constituent for the area. There exist some field measurements performed on water salinity, water temperature and current pattern in Oludeniz Lagoon. Even though measurements provide only some preliminary data for the site, favorable results have been obtained from the application of the model to a real coastal water body.