This study examines primary mechanisms that gave rise to the basin-wide variations of the sea surface temperature (SST) in the Indian Ocean during the 1997--98 El Ni¿o by using multi-source data sets. The evolution of some key atmosphere-ocean variables indicated that the SST variability in the Indian Ocean was largely attributable to the ENSO impact on the large-scale atmospheric circulation. During June--December 1997, when the El Ni¿o in the Pacific was maturing, the Indian Ocean experienced the reversal of the Walker Circulation and the prolonged equatorward displacement of the southeast trades. The resultant changes in surface wind influenced the SST through the following means. In the equatorial region, the easterly winds associated with the reversed Walker Circulation forced equatorial Kelvin/Rossby waves, which then affected the equatorial ocean heat balance (mainly through upwelling/downwelling) and led to the reversal of the zonal SST gradient in the fall of 1997. The negative SST anomalies in the east and positive anomalies in the west in turn helped maintain and prolong the equatorial easterlies, a clear indication of coupled atmosphere-ocean interactions in operation. Outside of the equatorial waveguide, changes of latent heat flux induced by wind speed variations played a major role in the broad-scale warming. The effect was most significant during the summer/ fall of 1997 when the southeasterly trade winds weakened considerably, leading to a dramatic reduction of latent heat release and subsequently a rapid surface warming in the southern ocean. ¿ 1999 American Geophysical Union