During the summer, nonlinear internal waves (NLIWs) are commonly observed propagating in Massachusetts Bay. The topography of the area is unique in the sense that the generation area (over Stellwagen Bank) is only 25 km away from the shoaling area, and thus it represents an excellent natural laboratory to study the life cycle of NLIWs. To assist in the interpretation of the data collected during the 1998 Massachusetts Bay Internal Wave Experiment (MBIWE98), a fully nonlinear and nonhydrostatic model covering the generation/shoaling region was developed, to investigate the response of the system to the range of background and driving conditions observed. Simplified models were also used to elucidate the role of nonlinearity and dispersion in shaping the NLIW field. This paper concentrates on the generation process and the subsequent evolution in the basin. The model was found to reproduce well the range of propagation characteristics observed (arrival time, propagation speed, amplitude), and provided a coherent framework to interpret the observations. Comparison with a fully nonlinear hydrostatic model shows that during the generation and initial evolution of the waves as they move away from Stellwagen Bank, dispersive effects play a negligible role. Thus the problem can be well understood considering the geometry of the characteristics along which the Riemann invariants of the hydrostatic problem propagate. Dispersion plays a role only during the evolution of the undular bore in the middle of Stellwagen Basin. The consequences for modeling NLIWs within hydrostatic models are briefly discussed at the end.