Two-way interactive nesting of primitive equation ocean models is investigated, with special attention to the problems encountered when oceanic features, for example fronts, intersect the boundaries between the models, and also when topography is present. The model has two interacting components, the coarse and fine grid regions. The fine grid region can have a finer resolution both in the horizontal and in the vertical than the coarse grid model, allowing refinement of topographic features in the vertical as well as the horizontal, although a model with nesting only in the horizontal is considered first, to clarify the effects of the lateral boundaries. An adaptation of the method of Spall and Holland is used. The interaction is two-way: the coarse grid fields are interpolated to provide boundary conditions for the fine grid region, and the variables on the fine grid are suitably averaged onto the coarse grid in order to drive the coarse grid model. Nested calculations with 3:1 grid ratios are presented. Modeling of frontal features using nested models is addressed and topography is introduced, but without refinement of the grid in the vertical in the fine grid region. It is shown that the generation of noise at the interface of the fine grid and coarse grid regions in the presence of topography can be dealt with by the use of a Newtonian damping scheme. Refinement of the fine grid region resolution in the vertical is implemented, and attention is drawn to problems arising when the fine and coarse grid topographies are not identical. Care also needs to he taken to ensure that the initial fields are resolved on both the coarse grid and the fine grid in the region of the interface in order to minimize the generation of disturbances. Comparison of the results of the nested model with a fine grid everywhere reference calculation shows the nesting technique to be working successfully over reasonably short periods of time integration (16 days) such as may be used operationally for ocean forecasting.