The meridional heat flux in the subpolar North Atlantic is pivotal to maintaining a relatively warm climate in Northern Europe. Much of the variability in the basin-wide northward heat flux between Greenland and Scotland occurs in the Iceland Basin (east of the Reykjanes Ridge and west of the Rockall Plateau), where the North Atlantic Current (NAC) carries relatively warm and salty water northward. As a component of the Overturning in the Subpolar North Atlantic Program (OSNAP), WHOI-OUC jointly deployed gliders in the Iceland Basin to continuously monitor the circulation and corresponding temperature flux associated with the NAC. In-situ observations indicate two circulation regimes in the Iceland Basin: a mesoscale eddy like pattern and northward flowing NAC pattern. When a mesoscale eddy is generated, the rotational currents associated with the eddy lead to both northward and southward flow in the Iceland basin. This is quite different from the broad northward flow associated with the NAC when there is no eddy. The transition between the two regimes coupled with the strong temperature front in the Iceland basin can modify the meridional temperature flux by the order of 0.3PW. The dramatic variability induced by alternating eddy and frontal patterns is also found in the high-resolution (1/12 degree) HYCOM simulations. In addition, a separation of large scale and mesoscale process in the model results suggests that eddies in the Iceland Basin make significant contributions to the variability of the total basinwide poleward temperature flux on time scales from subseasonal to interannual.