An ocean state estimate has been developed for the Gulf of Mexico (GoM) using the MIT general circulation model and its adjoint. The estimate has been tested by forecasting loop current (LC) evolution and eddy shedding in the GoM. The adjoint (or four-dimensional variational) method was used to match the model evolution to observations by adjusting model temperature and salinity initial conditions, open boundary conditions, and atmospheric forcing fields. The model was fit to satellite-derived along-track sea surface height, separated into temporal mean and anomalies, and gridded sea surface temperature for 2 month periods. The optimized state at the end of the assimilation period was used to initialize the forecast for 2 months. Forecasts explore practical LC predictability and provide a cross-validation test of the state estimate by comparing it to independent future observations. The model forecast was tested for several LC eddy separation events, including Eddy Franklin in May 2010 during the deepwater horizon oil spill disaster in the GoM. The forecast used monthly climatological open boundary conditions, atmospheric forcing, and run-off fluxes. The model performance was evaluated by computing model-observation root-mean-square difference (rmsd) during both the hindcast and forecast periods. The rmsd metrics for the forecast generally outperformed persistence (keeping the initial state fixed) and reference (forecast initialized using assimilated Hybrid Coordinate Ocean Model 1/12° global analysis) model simulations during LC eddy separation events for a period of 1̃2 months.