Subantarctic Mode Water (SAMW) is the name given to the relatively deep surface mixed layers found directly north of the Subantarctic Front in the Southern Ocean, and their extension into the thermocline as weakly stratified or low potential vorticity water masses. The objective of this study is to begin an investigation into the mechanisms controlling SAMW formation, through a heat budget calculation. ARGO profiling floats provide estimates of temperature and salinity typically in the upper 2,000 m and the horizontal velocity at various parking depths. These data are used to estimate terms in the mode water heat budget; in addition, mode water circulation is determined with ARGO data and earlier ALACE float data, and climatological hydrography. We find a rapid transition to thicker layers in the central South Indian Ocean, at about 70°S, associated with a reversal of the horizontal eddy heat diffusion in the surface layer and the meridional expansion of the ACC as it rounds the Kerguelen Plateau. These effects are ultimately related to the bathymetry of the region, leading to the seat of formation in the region southwest of Australia. Upstream of this region, the dominant terms in the heat budget are the air–sea flux, eddy diffusion, and Ekman heat transport, all having approximately equal importance. Within the formation area, the Ekman contribution dominates and leads to a downstream evolution of mode water properties.