The nearshore circulation and the wave characteristics are important parameters, which control coastline morphology. The interaction of nearshore circulation with coastal structures, modify the wave characteristics and seabed topography, often resulting in scour near the foundation of the structures. This paper deals with the numerical prediction of nearshore circulation induced due to wave setup in the nearshore region with and without the structure [(i) structure resting on seabed (ii) structure raised above the seabed]. It is also helps understand the deficiencies in studying the coastal characteristics by describing the flow field due to the wave velocity potential alone. Comparison of the results of both nearshore circulation and the wave potential model are discussed and the importance of the study and its prototype applications are highlighted. © 2001 Elsevier Science Ltd. All rights reserved.