This paper presents a normal mode approach for analyzing signal fluctuation in shallow water with a thermocline which fluctuates due to tides and internal waves. In the Yellow Sea 1996 experiment, variations of thermocline structure and internal waves were observed by CTD and thermistor chains. The cw and FM acoustic signals were measured over a 12-h period with two 16-hydrophone vertical arrays deployed 3.11 and 10.32 km from the source. The cw pulses were used to observe fluctuation at four specified frequencies. Amplitude fluctuations of more than 20 dB were observed. The FM signals were used to isolate individual normal modes by pulse compression and mode filtering. The influence of internal waves on the normal-mode structure and signal fluctuation was examined. It was found that the variation of the thermocline was significant in determining acoustic signal fluctuation. The normal-mode structure and dispersion relations in the channel depend strongly on the thermocline. Variation of the thermocline thus causes phase and group velocity to become variable. This leads to signal fluctuation, since the amplitude of the received signal is determined by interference between arriving modes. The study also showed that the amplitude fluctuation is weaker at shorter range.