The mean and annual cycle of energy flowing into the climate system and its storage, release, and transport in the atmosphere, ocean, and land surface are estimated with recent observations. An emphasis is placed on establishing internally consistent quantitative estimates with discussion and assessment of uncertainty. At the top of the atmosphere (TOA), adjusted radiances from the Earth Radiation Budget Experiment (ERBE) and Clouds and the Earth's Radiant Energy System (CERES) are used, while in the atmosphere the National Centers for Environmental Prediction-National Center for Atmospheric Research (NCEP-NCAR) reanalysis and 40-yr European Centre for Medium-Range Weather Forecasts (ECMWF) Re-Analysis (ERA-40) estimates are used. The net upward surface flux (F S ) over ocean is derived as the residual of the TOA and atmospheric energy budgets, and is compared with direct calculations of ocean heat content (O E ) and its tendency (␦O E /␦t) from several ocean temperature datasets. Over land, F S from a stand-alone simulation of the Community Land Model forced by observed fields is used. A depiction of the full energy budget based on ERBE fluxes from 1985 to 1989 and CERES fluxes from 2000 to 2004 is constructed that matches estimates of the global, global ocean, and global land imbalances. In addition, the annual cycle of the energy budget during both periods is examined and compared with ocean heat content changes.The near balance between the net TOA radiation (R T ) and F S over ocean and thus with O E , and between R T and atmospheric total energy divergence over land, are documented both in the mean and for the annual cycle. However, there is an annual mean transport of energy by the atmosphere from ocean to land regions of 2.2 Ϯ 0.1 PW (1 PW ϭ 10 15 W) primarily in the northern winter when the transport exceeds 5 PW. The global albedo is dominated by a semiannual cycle over the oceans, but combines with the large annual cycle in solar insolation to produce a peak in absorbed solar and net radiation in February, somewhat after the perihelion, and with the net radiation 4.3 PW higher than the annual mean, as it is enhanced by the annual cycle of outgoing longwave radiation that is dominated by land regions. In situ estimates of the annual variation of O E are found to be unrealistically large. Challenges in diagnosing the interannual variability in the energy budget and its relationship to climate change are identified in the context of the episodic and inconsistent nature of the observations.