Real-time and continuous passive acoustic monitoring of the ocean is one goal of the Monterey Bay Aquarium Research lnstitutes Ocean Acoustic Observatory project. Continuous real-time monitoring makes it possible to observe episodic and non-predictable phenomena such as biological and geological events. Animal calls, turbidity flows, underwater landslides and volcanic eruptions are examples of such events. MBARI has developed a state- of-art real-time system for multi-channel acquisition, beamforming, processing and archiving of acoustic data. The system is capable of collecting data from up to 32 hydrophones at the maximum sampling rate of 200 kHz per channel and can form up to 68 simultaneous beams in real time. A four- processor application accelerator performs various signal processing functions on the raw or beamformed data. Spectral analysis such as spectrogram computation, automatic detection, localisation, classification and display of sounds can be performed in real time. An event-based recording scheme can be selected to record only acoustic events of interest. The system is expandable to handle up to 512 channels of data from fixed or towed hydrophone arrays. This paper presents a detailed description of the acoustic observatory system, implemented algorithms and results from fixed or towed arrays from the Monterey Bay ocean region in Northern California.