Analysis of SAR images of internal waves (IWs) on the Iberian Shelf and classification of the IW surface signatures is presented. Three different types of short-period IW signatures in the form of bright/dark, dark and bright bands are characterised, corresponding respectively to positive/negative, negative or positive variations of radar backscatter. The observations show that at very low wind velocities (less than 2m/s) IWs show up as single positive sign. When the wind is higher than 2 m/s, and for IWs propagating in the radar range direction, both double and single negative signatures are common. For azimuth propagating IWs negative signatures prevail. Detailed in situ measurements of Internal Waves were performed in the study area during an oceanographic cruise conducted in the summer of 1994 (in the frame of the MAST project MORENA). Such measurements included the isotherm displacements due to the Internal Waves and simultaneous sampling of associated surface films. IW manifestations at low to moderate winds took the form of slicks located over IW troughs; at the near threshold wind velocity they were of the form of intensified dm-scale waves (anti-slicks) located over IW crests. Results of wave damping measurements from samples of films collected in slick and nonslick areas revealed that surfactants are effectively redistributed due to the Internal Wave orbital velocities. Such results were a stimulus to study the film effect in the damping of ripples in the Internal Wave field and its influence in the signatures observed in the radar images. A theoretical model of the surface wave modulation by IWs is developed, including surface wave straining due to the IW current and surface wave damping due to advection of surfactants. Pressure-area curves for real marine films are used in the model. The relation between the film and the straining effects on the surface wave spectrum variations depends on film parameters, surface wavelength and wind velocity. The model predicts intense damping of cm-scale waves over IW troughs mainly due to the film effect and intensification and depression of dm-scale waves due to both straining and film effects. Dependencies of the model spectrum variations as a function of wind velocity for range and azimuth propagating IWs are obtained, the negative sign contrast being shown to dominate for azimuth propagating IWs.