The Indian Ocean Dipole (IOD) is a natural ocean—atmosphere coupled mode that plays important roles in seasonal and interannual climate variations. The coupled mode locked to boreal summer and fall is distinguished as a dipole in the SST anomalies that are coupled to zonal winds. The equatorial winds reverse their direction from westerlies to easterlies during the peak phase of the positive IOD events when SST is cool in the east and warm in the west. In response to changes in the wind, the thermocline rises in the east and subsides in the west. Subsurface equatorial long Rossby waves play a major role in strengthening SST anomalies in (he central and western parts. The SINTEX-F1 coupled model results support the observational finding that these equatorial Rossby waves are coupled to the surface wind forcing associated with IOD rather than ENSO. The ENSO influence is only distinct in off-equatorial latitudes south of 10°S. Although IOD events dominate the ocean—atmosphere variability during its evolution, their less frequent occurrence compared to ENSO events leads the mode to the second seat in the interannual variability. Therefore, it is necessary to remove the most dominant uniform mode to capture the IOD statistically. The seasonally stratified correlation between the indices of IOD and ENSO peaks at 0.53 in September—November. This means that only one third of IOD events are associated with ENSO events. Since a large number of IOD events are not associated with ENSO events, the independent nature of IOD is examined using partial correlation and pure composite techniques. Through changes in atmospheric circulation and water vapor transport, a positive IOD event causes drought in Indonesia, above normal rainfall in Africa, India, Bangladesh and Vietnam, and dry as well as hot summer in Europe, Japan, Korea and East China. In the Southern Hemisphere, the positive IOD causes dry winter in Australia, and dry as well as warm conditions in Brazil. The identification of IOD events has raised a new possibility to make a real advance in the predictability of seasonal and interannual climate variations that originate in the tropics.