The applicability of satellite altimetry is assessed in the Mediterranean Sea, an area where the signals are weaker than those inferred from oceanic regions. Altimeter data from the ERS-1 satellite covering the time period from 14 April 1992 to 23 December 1993, i.e., a total of 17 cycles of 35 days plus one cycle of 24 days, are processed. The standard repeat pass analysis method is modified to avoid the difficulties due to inevitable land breaks in the orbit arcs and data gaps over the sea. Successively, the technique is applied to the group of altimetric profiles belonging to each track crossing the working area. A power spectral analysis in the most energetic region, i.e., the Algerian Basin, exhibits the distribution of the spatial scales of the sea surface variability: the instrumental noise dominates the spectrum at short wavelengths, whereas the oceanographic signal emerges in the 100-200 km range, where the wavenumber dependence is close to k2. A review of what is known about the Mediterranean circulation and its variability is briefly illustrated. A map of the sea surface topography variability is presented and interpreted: the results are qualitatively in agreement with estimates performed from traditional oceanographic surveys, infrared images and TOPEX/POSEIDON altimetry analysis, but significant differences occur in certain areas, such as the Alboran region. Variability greater than 6 cm rms is detected in the Algerian and Levantine regions, whereas the major part of the Mediterranean Sea has a relatively uniform low variability approaching 3-4 cm rms, close to the background noise, comprising all uncertainties in the computed altimeter orbit, measured altimeter range, geophysical corrections applied. In the previous regions, a set of collinear passes along a satellite's track is analysed and patterns in sea surface variability are compared with transient features. Length scales, dynamic topographic relief, eddy kinetic energy, translational speed and surface geostrophic velocity variations are characterized.