Internally generated variability in the subtropical gyre is studied as a possible mechanism for the observed interannual to decadal variability in subtropical mode water formation. An isopycnic ocean model with idealized geometry and forcing which mimics the North Atlantic subtropical gyre is used for this purpose. The horizontal resolution is sufficiently high and the friction and diffusion sufficiently low for the flow to become barotropically and baroclinically unstable. Two modes of low-frequency variability are found. Both modes consist of westward propagating thickness anomalies. The anomalies have a first baroclinic modal structure with a maximum amplitude at the thermocline. One mode has a timescale of 8 years and a basin wide spatial scale; the other has a timescale of 4.5 years and a smaller spatial scale. The modes appear to be damped when the diffusion is high. In that case, the 8-year mode can be excited by a spatially coherent stochastic wind stress. The evolution of the modes is determined by an interaction between the mean flow and the low-frequency variability itself. The modes are instabilities of the mean flow determined by the basic stratification. It appears that coupling to the atmosphere and a parameterization of surface mixing are necessary for the low-frequency variability to appear in the mixed layer. The coupling and surface mixing do not play a role in generating the modes. It is concluded that these internally generated modes may play a role in the observed variability in mode water formation. ¿ 2000 American Geophysical Union