This paper presents a modeling investigation of the hydrodynamic and sediment transport response of Chincoteague Bay (VA/MD, USA) to Hurricane Sandy using the Coupled Ocean-Atmosphere-Wave-Sediment-Transport (COAWST) modeling system. Several simulation scenarios with different combinations of remote and local forces were conducted to identify the dominant physical processes. While 80% of the water level increase in the bay was due to coastal sea level at the peak of the storm, a rich spatial and temporal variability in water surface slope was induced by local winds and waves. Local wind increased vertical mixing, horizontal exchanges, and flushing through the inlets. Remote waves (swell) enhanced southward flow through wave setup gradients between the inlets, and increased locally generated wave heights. Locally generated waves had a negligible effect on water level but reduced the residual flow up to 70% due to enhanced apparent roughness and breaking-induced forces. Locally generated waves dominated bed shear stress and sediment resuspension in the bay. Sediment transport patterns mirrored the interior coastline shape and generated deposition on inundated areas. The bay served as a source of fine sediment to the inner shelf, and the ocean-facing barrier island accumulated sand from landward-directed overwash. Despite the intensity of the storm forcing, the bathymetric changes in the bay were on the order of centimeters. This work demonstrates the spectrum of responses to storm forcing, and highlights the importance of local and remote processes on back-barrier estuarine function.