The generation mechanism of mesoscale eddies in the Faroe Bank Channel (FBC) overflow region and their spatiotemporal characteristics are examined using the high-resolution regional Massachusetts Institute of Technology general circulation model (MITgcm). From the modeled overflow, it is found that the volume transport downstream of the FBC sill exhibits strong variability with a distinct period of similar to 4 days. Energetic, alternating cyclonic and anticyclonic eddies appear at similar to 40 km downstream of the sill. They grow side by side in the nascent stage, but later the cyclones migrate along the 800-m isobath to the south of Iceland, whereas the anticyclones descend downslope across the isobath and gradually dissipate. Analysis of the eddy characteristics shows that the cyclones are associated with a larger plume thickness and width, larger volume transport, colder and denser water, and a plume core located farther downslope, whereas the opposite is true for the anticyclones. The oscillatory structure developed at the lower boundary of the mean plume and the following generation of alternating cyclones and anticyclones are typical features of baroclinic instability. A linear instability analysis of a two-layer analytical baroclinic model yields a most unstable mode that agrees favorably with the simulations. The calculation of the divergent eddy heat flux shows a substantial rightward (upslope)-directed component downstream of the FBC sill. This region is also associated with a strong baroclinic conversion rate. The above arguments constitute evidence for the generation of unstable plume and mesoscale eddies in the FBC region by baroclinic instability.