Global average sea surface temperature (SST) from 40 ¿S to 60 ¿N fluctuates ¿0.3 ¿C on interannual period scales, with global warming (cooling) during El Ni¿o (La Ni¿a). About 90% of the global warming during El Ni¿o occurs in the tropical global ocean from 20 ¿S to 20 ¿N, half because of large SST anomalies in the tropical Pacific associated with El Ni¿o and the other half because of warm SST anomalies occurring over ~80% of the tropical global ocean. From examination of National Centers for Environmental Prediction <Kalnay et al., 1996> and Comprehensive Ocean-Atmosphere Data Set <Woodruff et al., 1993> reanalyses, tropical global warming during El Ni¿o is associated with higher troposphere moisture content and cloud cover, with reduced trade wind intensity occurring during the onset phase of El Ni¿o. During this onset phase the tropical global average diabatic heat storage tendency in the layer above the main pycnocline is 1--3 W m-2 above normal. Its principal source is a reduction in the poleward Ekman heat flux out of the tropical ocean of 2--5 W m-2. Subsequently, peak tropical global warming during El Ni¿o is dissipated by an increase in the flux of latent heat to the troposphere of 2--5 W m-2, with reduced shortwave and longwave radiative fluxes in response to increased cloud cover tending to cancel each other. In the extratropical global ocean the reduction in poleward Ekman heat flux out of the tropics during the onset of El Ni¿o tends to be balanced by reduction in the flux of latent heat to the troposphere. Thus global warming and cooling during Earth's internal mode of interannual climate variability arise from fluctuations in the global hydrological balance, not the global radiation balance. Since it occurs in the absence of extraterrestrial and anthropogenic forcing, global warming on decadal, interdecadal, and centennial period scales may also occur in association with Earth's internal modes of climate variability on those scales. ¿ 2001 American Geophysical Union