The POSEIDON monitoring and forecasting system of the Eastern Mediterranean is being upgraded over the past 3 years (2005-2008) in order to a) extend the buoy network to the Ionian and the Levantine seas with 5 new buoys b) upgrade the observing capacity in selected locations of key importance including physical and biochemical parameters c) enhance the forecasting skill and extend it to the whole Mediterranean including ecosystem modelling. Apart of the standard network, the monitoring system now includes the totally re-built multi-parametric E1-M3A observatory of the Cretan Sea and a second deep sea mooring with an autonomous sea-floor platform in the Ionian Sea. The forecasting component includes high resolution weather, wave hydrodynamics and ecosystem modelling for the whole Mediterranean and the Aegean Seas. The POM-based hydrodynamic forecasting component has two configurations: the first downscales the MERSEA-MFS basin scale forecast products (1/16°) into the Aegean Sea (1/30°) and the second covers the whole Mediterranean (1/10°) with downscaling to the Aegean Sea. The latter configuration uses data assimilation of satellite and in situ observations. The same nesting approach is followed for the wave model which is based on the WAM-Cycle4 code, while the ERSEM-based ecosystem model runs on a single Mediterranean-scale configuration (1/10°). Atmospheric forcing is provided by the 1/20° non-hydrostatic ETA model and covers the whole Mediterranean and Black Sea areas. Finally, the oil spill forecasting service is made available for both the Mediterranean and Aegean Seas and is extended with an object drift module (Leeway model).