Recent observational studies have detected coherent oceanic and atmospheric Antarctic circumpolar waves (ACWs) which propagate eastward at speeds of 6--8 cm s-1 with a circumpolar wavenumber of 2. Analysis of global wind data suggests that the ACWs are not remotely forced by tropical El Ni¿o activity through atmospheric teleconnection. Rather, a coupled instability of the Antarctic Circumpolar Current and its overlying atmospheric motion is proposed to be responsible for the generation of the ACWs. The phase relationship among the observed oceanic and atmospheric variables supports the coupled instability theory. This study provides one clear example that extratropical ocean-atmosphere dynamical coupling is essential in generating climate variations on time scales of several years and longer.¿ 1997 American Geophysical Union