A sub-Arctic “hot spot” of intense synoptic-scale variability is observed in the Lofoten Basin (LB) of the Norwegian Sea. Using ERS-1/2 and Envisat satellite altimetry measurements, we discover a cyclonic propagation of the synoptic-scale sea surface height anomalies around the center of the LB. Surface drifter trajectories do not reveal an associated coherent near-surface cyclonic flow suggesting that the propagating signals have a wavelike nature. We identify a dipole and a quadrupole wave modes rotating around the center of the LB, obtain analytic dispersion relations for these modes, and demonstrate that the observed propagation is a manifestation of topographic Rossby waves. Most of the observed waves have a wavelength of about 500 km and phase speeds ranging from 2 to 10 km/day. We show that these waves are largely responsible for the localization and amplification of sea surface height variability in the center of the LB.